• ASEAN’s Unanswered Question on the RCEP

    A month has passed since negotiators from the ten ASEAN member-states and its six Dialogue Partners gathered in Kuala Lumpur for the third round of talks on the Regional Comprehensive Economic Partnership (RCEP). With the aim of “achieving a modern, compr

  • ASEAN’s Treaty of Amity & Cooperation and the Nobel Peace Prize: Nomination for 2015?

    As the great and the good of the region gathered in Nay Pyi Daw last month for the 21st ASEAN Regional Forum, there was a rather predictable if not dull feeling to it all. They came (with bold promises). They talked (about the South China Sea as always).

ASEAN’s Unanswered Question on the RCEP

A month has passed since negotiators from the ten ASEAN member-states and its six Dialogue Partners gathered in Kuala Lumpur for the third round of talks on the Regional Comprehensive Economic Partnership (RCEP). With the aim of “achieving a modern, comprehensive, high-quality and mutually beneficial economic partnership agreement among the ASEAN Member States and ASEAN’s FTA Partners”, the series of RCEP negotiations are scheduled to be completed by 2015. If realized, the ten ASEAN Member-States together with its six current FTA Partners of Australia, China, India, Japan, Korea and New Zealand stand to benefit from an integrated market of three billion people and a combined GDP of US$17.23 trillion.

Given the economic benefits it promises, it is unsurprising that the RCEP negotiation process is being eagerly monitored by others in the region. Taiwan and Hong Kong, for example, have expressed their interests in joining the RCEP so as not to miss out from the region’s expected windfall.

ASEAN itself has also left the door open for others to join by committing to an ‘Open Accession’ clause, so as to “enable the participation of any ASEAN FTA partner that did not participate in the RCEP negotiations and any other external economic partners after the completion of the RCEP negotiations.”

Unfortunately, this is where things start to become confusing. At The Habibie Center’s Talking ASEAN discussion in Jakarta, it was noted that “other external economic partners” was a new terminology that had never before been used by ASEAN. As such its meaning and more importantly its potential consequences remained as yet unknown.

A reference to Chapter XII of the ASEAN Charter on External Relations – and in particular, Article 44 – reveals five categories already adopted by the regional organization. Namely: Dialogue Partner; Sectoral Dialogue Partner; Development Partner; Special Observer; & Guest. Logically then, “other external economic partners” should be distinct from these categories and mean something entirely different. As such, it was unlikely for “other external economic partner” to mean the European Union or the United States as these were already ASEAN Dialogue Partners.

Instead it has been suggested that the ambiguity of “other external economic partners” was a creative and elegant piece of drafting by ASEAN that afforded the regional organization a degree of flexibility as it tries to manoeuvre itself through the sensitive and complex minefield that is the Asia-Pacific political sphere. One such minefield is the One China Policy, which all member-states of ASEAN strictly observe. Could “other external economic partners” therefore apply to Taiwan and Hong Kong, enabling ASEAN to sift through the political minefield?

Certainly that is the hope among Taiwanese and Hong Kong officials. ASEAN too should seriously weigh the pros and cons of including Taiwan and Hong Kong as “other external economic partners.” For example, total trade between ASEAN countries and Taiwan stood at US$88.08 billion in 2012 while total trade between ASEAN countries and Hong Kong stood at US$94.08 billion in 2011. Such figures dwarf that of ASEAN total trade with current RCEP members such as India (US$68.42 billion in 2011), Australia (US$59.47billion in 2011) and New Zealand (US$8.24 billion in 2011).

It is unsurprising then that last year in June 2013, ASEAN foreign ministers announced that ASEAN would be working towards establishing an ASEAN-Hong Kong Free Trade Agreement. A further interesting development worth noting was the signing of a free trade agreement between New Zealand and Taiwan in July 2013 to go along with Wellington’s existing free trade agreements with China (2008) and Hong Kong (2010).

Significantly, the move has been defended by New Zealand as in keeping with the One China Policy – rather than in violation of it – by treating China, Taiwan and Hong Kong as one country. Moreover, the reaction of Beijing to New Zealand’s move was simply to state that China did not object to others “engaging in civil, economic and cultural exchanges” with Taiwan as long as they refrained from “official relations in any form.”

New Zealand’s rationale and China’s apparent acquiescence may show the way for ASEAN to sift through the political provide important lessons on how ASEAN could

Therefore while the term “other external economic partners” is an elegant and creative piece of drafting, the ambiguity of it would one day require exploring to once and for all address ASEAN’s unanswered question on the RCEP. By doing so, the challenge of “achieving a modern, comprehensive, high-quality and mutually beneficial economic partnership agreement” may become one step easier.

Written by : A. Ibrahim Almutaqqi, The Habibie Center

22 November 2014

ASEAN’s Unanswered Question on the RCEP

A month has passed since negotiators from the ten ASEAN member-states and its six Dialogue Partners gathered in Kuala Lumpur for the third round of talks on the Regional Comprehensive Economic Partnership (RCEP). With the aim of “achieving a modern, compr

22 November 2014

ASEAN’s Treaty of Amity & Cooperation and the Nobel Peace Prize: Nomination for 2015?

As the great and the good of the region gathered in Nay Pyi Daw last month for the 21st ASEAN Regional Forum, there was a rather predictable if not dull feeling to it all. They came (with bold promises). They talked (about the South China Sea as always).