The Regional Comprehensive Economic Partnership (RCEP) will play a key role in Post COVID-19 economic recovery and greater regional integration, said a Malaysian expert.
“The signing of the RCEP signifies a major step towards regional economic integration which is crucial in the Post-COVID-19 economic recovery,” said Ong Tee Keat, Founding Chairman of Center for New Inclusive Asia Studies, a think tank based in Kuala Lumpur.
“With the RCEP coming into fruition, a huge market comprising about 30 percent of the world population is all set to open up. This is indeed a positive, exemplary move in embracing multilateralism amid the heightening economic nationalism, notably after the pandemic outbreak,” he told Xinhua in an interview.
The RCEP is a mega trade pact proposed by ASEAN to boost trade among its Member States and with its free trade agreement (FTA) Partners.
It includes the 10 ASEAN Members, namely Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam, and the bloc’s five FTA partners of Australia, China, Japan, New Zealand, and South Korea. Negotiations of the RCEP were formally launched in November, 2012.
The RCEP currently accounts for about 30 percent of the global population, as well as nearly 30 percent of world’s gross domestic product (GDP) and global trade.
Ong said that the RCEP will help unlock ASEAN’s huge potential.
Ong also expressed hope that greater economic integration will bring business and economic growth back at the forefront of regional agenda.
“Hopefully, with the economic integration taking the center stage, geopolitics would take a back seat,” he said.
The RCEP will inject fresh impetus into the economic cooperation between ASEAN and China, according to Ong.
Among the benefits for ASEAN will be benefiting from China’s strong lead in artificial intelligence (AI), cloud computing, drones and other technology, which the bloc needs to upgrade the viability and competitiveness of its existing value chain and supply chain of agriculture and industrial production, he said.
Ong, a former Malaysian transport minister, said he expects to see a synergy between the RCEP and the China-proposed Belt and Road Initiative (BRI), which would help empower these countries through technology sharing and transfer from China to its BRI partners within the RCEP framework.
“This, in itself, is a good and viable diplomatic outreach that can meet the needs of many developing countries, yearning for their own homegrown value chain and supply chain but are mostly constrained by the lack of technology know-how,” he said.
Against the COVID-19 outbreak, trade and investment between China and ASEAN have bucked the trend to continue on a growth trajectory, with ASEAN becoming China’s largest trading partner, and China’s investment in ASEAN increasing by 76.6 percent year-on-year in the first three quarters of 2020.
As far as Malaysia is concerned, Ong said the RCEP will grant it greater access to a huge open market beyond ASEAN, providing a timely and needed boost to its post-COVID-19 economic recovery.
Malaysia will also benefit from the bigger China-ASEAN Trade as China, the largest trading partner of ASEAN, with its new mode of economic development being in place, will unleash further potential for trade for its trading partners to harness, he said.