RCEP should be more than sum of Asean +1 FTAs, says PM Lee

MANILA —  A trade pact currently being negotiated between Asean and six other countries must bring greater benefits than the grouping’s existing Free Trade Agreements (FTAs) with some of its dialogue partners, said Prime Minister Lee Hsien Loong on Saturday (Apr 29).

Speaking to Singapore media as he wrapped up a visit to Manila to attend the 30th Association of South-east Asian Nations (Asean) Summit, Mr Lee noted that Asean already has FTAs with dialogue partners such as South Korea, China, Japan and India.

“The RCEP, if it is just all the Asean plus one FTAs superimposed on top of each other. It is really not worth very much,” he said, referring to the Regional Comprehensive Economic Partnership being negotiated between the 10 Asean member states, China, Japan, South Korea, Australia, New Zealand, and India.

“It (the RCEP) has to be something more than the Asean plus ones (FTAs)... I think that is what we should be working for. It is just Singapore's point of view, the others may have different perspectives,” he said.

“We hope to have a good RCEP and not just an RCEP because you want to have some substance there to make it worthwhile.”

Negotiations for RCEP started in late 2012 and have taken longer than expected. Part of the problem is that some of Asean’s dialogue partners, such as India and China, do not have existing FTAs with each other.

However, observers say that there may now be more momentum to conclude the RCEP, especially after American President Donald Trump withdrew the United States from the landmark Trans-Pacific Partnership (TPP), which covers more than 40 per cent of global economic output.

Some TPP signatories have proposed a TPP minus one format – without the US – to salvage the agreement.

Earlier on Saturday, Mr Lee told Asean leaders that rather than set a low bar for RCEP, Asean should push hard to conclude it speedily.

When asked by reporters whether the bar for RCEP should be set as high as the TPP, Mr Lee said: “I don't think you can set the bar as high as the TPP because for the TPP, one of the major players was the United States.”

“The US could insist on all sorts of things which are important to them whether it is intellectual property or pharmaceuticals or movies or so on. Because they could bring something to the table: their economy, access to their economy, and that's the biggest economy in the world,” he said.

Mr Lee said that since the US has been removed from the equation, “whether it is TPP minus one, whether it is RCEP, you have to work out a different form”.

He said for the RCEP package, it needs to be “substantially meaningful and has balanced benefits for all the participants in the package”.

“For RCEP, (the) Americans are not there, (the) participants are different,” added Mr Lee, as he noted that both China and India have different calculations on RCEP.

“There are difficult trade-offs so unless we are prepared to make some of these difficult trade-offs I think the RCEP risks becoming much ado about nothing and that would be a real pity.”

When asked if Asean’s deadline to conclude the RCEP by end of 2017 was realistic, Mr Lee said: “I'm not a betting person but I think that we need to work on it a little bit longer”.

“We try our best and we set deadlines and you try to work towards that but I think that this will probably take a while more.” 

Commenting on Asean’s ties with Washington and Beijing, Mr Lee said “there was a feeling around the table that we (the leaders) do want engagement with both of the major powers”.

“And with America particularly in this new environment to maintain the relationship which goes well beyond the (Trump) administration,” he said.

“It (Asean-US ties) also has to do with the economic relationship, the security relationship, the anti-terrorism issues, educational issues, people-to-people links. They're very deep links, especially here in the Philippines, which had historical ties as well".