Taiwan, Unable to Join RCEP, Looks to CPTPP

United Daily News, November 16, 2020

The Regional Comprehensive Economic Partnership (RCEP) agreement, the world's largest free trade agreement, was signed by 15 countries representing 10 Association of Southeast Asian Nations (ASEAN) states as well as Australia, China, Japan, South Korea and New Zealand on the sidelines of the ASEAN summit in Hanoi, Vietnam on November 15 by video conference. According to the Reuters, the RCEP will better shape regional trade norms, in contrast to the U.S. withdrawal from the Trans-Pacific Partnership (TPP) negotiations and its non-participation in the RCEP negotiations, which has been called into question about American willingness to involve in Asian affairs.

The Ministry of Foreign Affairs stated that it was practically difficult for Taiwan to join the RCEP Agreement, the negotiations of which had been spearheaded by China, and this island republic will continue to push for its accession to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). According to Minister of Economic Affairs Wang Mei-hua, China, Japan and South Korea will lower their tariffs, the petrochemical industry in Taiwan is to bear the brunt as a result; while the upstream raw materials of the textile industry will also combat challenge. The automobile parts and steel industry, which exported their products to mainly Europe and the United States, will receive limited impact. The machine tool industry needs to proceed to undertake diversification and enhance its competitiveness.

In a joint leaders’ statement, the 15 leaders said they were "pleased to see the completion of the RCEP Agreement, which demonstrates countries' commitment to economic recovery, inclusive development, job creation, strengthening of regional supply chains, and an open, inclusive, rules-based set of trade and investment agreements," at a time when the world is facing the unprecedented challenge of the coronavirus (COVID-19) pandemic.

The statement said the RCEP agreement will open up many opportunities for businesses in the region to gain market access, particularly under the liberalization of trade in services, goods and investment. The statement also noted that the RCEP Agreement remains open to India, which is welcome to join. India announced its withdrawal from the RCEP negotiations last November, 2019 on the grounds that it was detrimental to its economic and trade development.

The RCEP Agreement will enter into force within two years after ratification by 15 countries. The agreement, which covers 2.2 billion people, accounted for 30 percent of the world's gross domestic product and 28 percent of global trade. The RCEP would help reduce or eliminate tariffs on agricultural and industrial products and would set rules for data transmission, said Director Leong Hoang Thai of the Multilateral Trade Policy Department, Ministry of Industry and Trade, Vietnam.

The RCEP agreement is the first free trade agreement linking China and Japan, the two largest economies in Asia. It covers trade in goods and services, investment, e-commerce, intellectual property, government procurement, competition, small and medium-sized enterprises, and economic and technical cooperation with the aim of increasing rule-based economic interactions among its members.

Reuters and other foreign media consider that the United States had additionally missed the boat already due to the signing of the RCEP Agreement, diminishing its regional influences and making China’s relations with other economic partners upgraded.

Several analysts believed that the new Biden administration was unlikely to return to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which had been spearheaded by the United States and taken over by Japan, in the foreseeable near future.

After eight years of negotiations, 15 countries had signed the RCEP Agreement as previously stated. Taiwan’s trade with RCEP agreement signatories accounted for 59% of the former’s total trade and 65 percent of its foreign direct investment. In the past four years, however, there has been no concrete effort by the Democratic Progressive Party (DPP) government to seek to participate in the RCEP negotiations. And if the DPP still knocks on the wrong door, Taiwan is doomed to be excluded from this regional free trade agreement. The opposition Kuomintang advised the administration of President Tsai Ing-wen to convene a series of urgent high-level meeting to assess the overall impacts of RCEP agreement on Taiwan and map out the right ways to treat it seriously.

From:

http://vip.udn.com/vip/story/121523/5018085

https://udn.com/news/story/121799/5016692

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