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Regional Comprehensive Eco Partnership to help build supply chain

Posted on Jan 30, 09:48AM | UNI

Agra, Jan 29 : Mr Nguyen Cam Tu, Vice Minister of Industry and Trade, Vietnam today said the main purpose of initiating the ASEAN+6 Regional Economic Partnership (RCEP) Agreement negotiations was to transform the entire region by achieving higher economic growth through more cross-border trade and investment

Chairing the session in the Partnership Summit here, Mr Ajay Shriram, Vice President, CII underlined the importance of RCEP for furthering the objectives of India's Look East Policy, launched in early 1990s and gained strength in the course of last two decades

Mr Michael Yeoh, CEO of Asian Strategy and Leadership Institute, Malaysia is his speech emphasised on the centrality of ASEAN in the proposed RCEP agreement. He said ASEAN had come a long way and was currently the third most important growth engine after China and India. According to him, RCEP held the key in successful execution of ASEAN Master Plan on Connectivity, which includes physical, institutional and people-to-people connectivity

The session was also addressed by senior Japanese official from Ministry of Economy, Trade and Industry (METI), Shigehiro Tanaka who identified three pertinent reasons for joining RCEP - first and foremost being integration into the supply chain, which had already developed in the past decade in this region

The second most important factor Mr, Tanaka mentioned was cross-border investment. A comprehensive agreement like RCEP would help facilitate more cross-border investment as the region had a mix of both capital rich countries like Japan and Korea and least developed countries like Laos and Cambodia. The third crucial reason behind joining RCEP was to create an innovative environment, which would help strengthen the competitiveness of member countries

Only last month India and ASEAN celebrated their 20th commemorative year of bilateral relations at New Delhi, Mr Shriram hoted adding that RCEP had huge trade potential

The Regional Comprehensive Economic Partnership (RCEP) negotiations were launched by leaders from ASEAN and ASEAN's FTA partners on the margins of the East Asia Summit in Phnom Penh, Cambodia in November 2012

The RCEP aims to be the largest free-trade bloc in the world, comprising all 10 ASEAN nations and six other countries with which the group has free-trade agreements (FTAs)-China, India, Japan, South Korea, Australia, and New Zealand

The grouping includes more than 3 billion people and has a combined GDP of about 17 trillion US dollars,, and accounts for about 40 per cent of world trade. Negotiations are slated to begin in early 2013 and are expected to conclude by the end of 2015

The objective of RCEP is to attain a comprehensive and mutually beneficial economic partnership agreement that involves deeper engagement than the existing ASEAN FTAs

Working groups involving ASEAN member states and FTA partners on trade in goods, trade in services, and investment have already been established

However, RCEP is not free from challenges. The key challenges the countries might face in course of negotiations as well as its successful implementation are takan the countries of RCEP are at different stages of development, need to build a strong political will, challenge of increasing the private sector participation, resolving institutional issues and finally solving the complexity arising out of Rules of Origin