By Jae-Kyung Park
This year’s ASEAN Summit and related meetings will begin November 18 in Phnom Penh, Cambodia. Among the several hundred meetings the ASEAN Chair country hosts in a year, the summit meetings are the headlining events, with participation from leaders of all major countries in the region, including China and the United States. This year’s meeting is expected to produce the launch of a free trade area agreement called the Regional Comprehensive Economic Partnership (RCEP). To some, this has been regarded simply as ASEAN+6 (China, Japan, Republic of Korea, Australia, New Zealand, and India) trade liberalization, yet it is more complex in reality.
In recent years, until the end of 2011, there have been two competing trade liberalization efforts, the East Asia Free Trade Area (EAFTA) and the Comprehensive Economic Partnership in East Asia (CEPEA). Though both articulated East Asia as a regional boundary, each advocated different membership. The idea of EAFTA, which was preferred by China, envisaged an FTA among ASEAN+3 (China, Japan, and Korea). To the contrary, the idea of CEPEA, which was preferred by Japan, was among the ASEAN+6 or previous East Asia Summit member countries.
There was a strong preference from one country to the next over the two FTAs. Even so, each government could flatter with diplomatic niceties while entertaining two ideas at the same time, and substantial discussion remained at the track two level. However, when the ideas became mature at governmental level meetings, it became hard to examine and consider the two in parallel.
A compromise was made in 2010 and 2011 through the efforts of four government working groups on issues including rules or origin, tariff nomenclature, customs procedures, and economic cooperation. ASEAN was clever in carefully naming the working group “ASEAN Plus Working Groups,” without adding a specific number, though the meetings were in reality ASEAN+6. However, the working group did not solve fully the inherently redundant nature of the two FTAs.
During the ASEAN Summit and related meetings in November 2011 in Bali, ASEAN once again surprised its dialogue partners by suggesting the RCEP, but not just in name this time. The idea was that both EAFTA and CEPEA would be born again with a new ASEAN-centered FTA, which would be open to any outsiders who signed (and would sign in the future) individual ASEAN+1 FTAs, or “ASEAN FTA Partners.” It happens to be the case that those partners coincided with the six countries, which made up the CEPEA.
It is now in the hands of each FTA partner to join the RCEP or not. It seems highly likely that on the occasion of ASEAN Summit meeting next week, there will be an announcement for the launch of the RCEP negotiation with guiding principles and a timeline with the participation of all six dialogue partners. From an economic perspective, it is realistic to forecast that the RCEP may not be able to reach a higher level of liberalization. Yet, from a strategic perspective, the initiative will remain another case of ASEAN centrality.