By Palwasha Nawaz
In the modern era, economicintegration between multilateral states has become an indicator of regional stability and geo-political dominance for countries worldwide. Many states with immense geo-political and socio-economic potential have carved their way out of the dark era of colonization after getting liberated from their European exploiters. In this aspect, Indonesia and its immediate neighborsrightly fall under this category. These countries have gone through different transitional phases since their independence and have finally embarked on a journey of economic prosperity through the Association of Southeast Asian Nations (ASEAN).The article elaboratesthe substantial efforts of Indonesia, as a leader of ASEAN, and other countries within this organization,to strengthened their economic interests vis-à-vis RCEP. Moreover,the study highlights significant initiatives by this association for engaging Regional Comprehensive Economic Partnership (RCEP) for integrated economic prosperity. The study also provides future options and benefits that Pakistan can acquire through this broader economic alliance.
Introduction: With the ever-increasing socio-economic and political strength of ASEAN countries, the need for the advanced partnership for sustainability with other countries in the region wasfelt in the South-East Asian region and beyond. After numerous rounds of RCEP negotiations during the previous decade, it was finally signed by 15 member states on 15th November 2020 via video link due to travel restrictions imposed because ofthe COVID-19 pandemic. The states include Asia Pacific nations i.e., China, Japan, South Korea, Australia, and New Zealand, plus ten countries of ASEAN. Moreover, because of the pivotal role of ASEAN countries in making RCEP a reality, the Secretary-General of this Association was made RCEP network’s depositary. As a relatively new free trade alliance with immense prospects of enhancing economic cooperation, it is necessary to evaluate the existing and future potential.Economic development within RCEP networkpresents signatories of this agreement and for other Asian countries like Pakistan, with inclusive economic potential.
Economic Benefits for ASEAN and its Dialogue Partners through RCEP: The economic powers in the ASEAN regionhave decided to transcend beyond their previous economic block to engage other economic countries far and wide through RCEP. In this aspect, it is imperative to know how efficacious this free trade agreement can be in the time to come. The following points elaborate the efficacy of this economic alliance in considerable length:
a. Huge Population and Economic Weight of RCEP member States: Many agreements for multilateral trade and other economic acts have been signed amongstates. However,billions of people and multiple global economic and political powerhouses in this agreement speak volumes about the economic potential of this block. RCEP is in its initial phase,but it is anticipated that it willcreate a combined market of 2.2 billion people. Furthermore, it will account for 29 percent of the world’s Gross Domestic Product (GDP).
b. Reduction of Tariffs and Non-tariff Barriers: By reducing trade barriers, RCEP can enhance credible economic linkages between its member states. With China’s inclusion, it is expected that other countries in this free trade alliance will get huge dividends from its economic growth by conducting incentivized international trade with it. Moreover, the reduction of such barriers can help the post-COVID economic development of the countries involved in this agreement.
c. Strengthening the Supply Chain Synchronization: Post-COVID-19 Situation
Due to the travel restrictions during the COVID-19 pandemic, trade activities between various countries have been greatly disrupted. With the help of incentivized multilateral free trade agreement through RCEP, it is expected that many restrictedprotocols that are detrimental to multilateral trade will be relaxed for ease of doing business between the member States.
d. An Effective Forum for Promoting Multilateral Trade: In an era, unilateral decisions like Brexit and America Firstprove to be detrimental for the socio-economic growth of the world. Initiatives like RCEP provides hope for enhanced multilateral trade between many small and big trading stateswithin its ambit. The Chinese grand vision of a community with shared future compliments the cooperative ideals of multilateral trade found in RCEP objectives. Under such circumstances, it is needless to say how much economic growth can signatories of this agreement can have in the years to come.
e. RCEP’s Potential to Include Non-ASEAN Countries:
Presently, the primary signatories in RCEP are the ASEAN countries. There are some hurdles in achieving the sustainable development goals of many ASEAN and RCEP states. However, to overcome certain challenges, continuedfacilitation between RCEP and non-RCEP countries can be decisive. Making this inclusive economic partnership for its non-member countries like Pakistan is important because multi-faceted and cross-sectoral nature.
–The writer is an Executive, Center for Global & Strategic Studies (CGSS), Islamabad.