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1. Pakistan’s Hard Policy Choices in Afghanistan

Author:
International Crisis Group
Publication Date:
02-2022
Content Type:
Special Report
Institution:
International Crisis Group
Abstract:
Islamabad must tread carefully with its long-time Taliban allies back in power in Kabul. Pitfalls lie ahead for Pakistan’s domestic security and its foreign relations. The Pakistani government should encourage Afghanistan’s new authorities down the path of compromise with international demands regarding rights and counter-terrorism.
Topic:
Diplomacy, Regional Cooperation, Bilateral Relations, Governance, and Leadership
Political Geography:
Pakistan, Afghanistan, Middle East, and Asia

2. New Dynamism in ASEAN and East Asia: The Role of the RCEP as a ‘Living’ Agreement

Author:
Shandre Mugan Thangavelu, Fukunari Kimura, and Dionisius Narjoko
Publication Date:
12-2022
Content Type:
Policy Brief
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This policy brief highlights the importance of maintaining open regionalism and economic and regional integration for sustainable and inclusive regional and global growth in the Association of Southeast Asian Nations (ASEAN) and East Asia. With rising global uncertainties and global value chain (GVC) disruptions, the region requires a new economic and social agenda beyond trading arrangements, and the alignment of global, regional, and domestic policies and structural issues. The Regional Comprehensive Economic Partnership (RCEP) is expected to provide a new institutional framework under the built-in institutional feature (Chapter 18) of the agreement.
Topic:
International Trade and Finance, Regional Cooperation, Regionalism, and Global Value Chains
Political Geography:
Asia and ASEAN

3. The Indo-Pacific Partnership and Digital Trade Rule Setting: Policy Proposals

Author:
Lurong Cheh
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The idea of the Indo-Pacific was borne from a global trend that has (re)oriented the centre of the world’s economic gravity to the East. Accelerating digital transformation to harness gains from technology are in countries’ common interests. The launch of the Indo-Pacific Economic Framework for Prosperity tends to supplement economic benefits to the Indo-Pacific. Becoming more deeply involved in the digital economy will require Indo-Pacific members to commit to new international norms on digital trade, of which trade liberalisation of electronic transmissions, free flow of data with trust, cybersecurity, and intellectual property rights protection must be prioritised.
Topic:
Development, International Trade and Finance, Regional Cooperation, and Digital Economy
Political Geography:
Asia and Indo-Pacific

4. Japan and the Regional Comprehensive Economic Partnership (RCEP)

Author:
Mie Oba
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper aims to clarify the role of Japan in the process leading up to the establishment of the Regional Comprehensive Economic Partnership (RCEP). While emphasising that respect for the centrality of the Association of Southeast Asian Nations (ASEAN) was a principle of RCEP, Japan played a leading role in the process of RCEP negotiations. For Japan, RCEP is one of the fruits of its strategy in East Asia/Asia-Pacific that began the mid-1990s to protect and increase the interests and advantages of Japanese business and retain Japan’s political leverage in the region. When substantial negotiations for RCEP began in 2013, its importance for Japan was secondary to other free trade agreements (FTAs) including the Trans-Pacific Partnership, China–Japan–Korea FTA, and Japan–European Union FTA. However, the Government of Japan and the business community had set a lot of economic and strategic goals in promoting RCEP. After the withdrawal of the United States (US) from the Trans-Pacific Partnership, RCEP was seen as an essential framework for establishing a rules-based regional order in the Indo-Pacific region. Although it was after India’s withdrawal from the RCEP negotiations, Japan further emphasised the importance of RCEP as the measure to sustain and foster the rule-based regional order and simultaneously pursued the conclusion of negotiations and the establishment of high-level rules, achieving some success. Ultimately, the havoc brought about by the coronavirus disease (COVID-19) pandemic and the sense of crisis in the traditional liberal international order caused by the intensifying strategic competition between the US and China, drove the conclusion of RCEP. RCEP will be increasingly important for economic order in Japan and Asia in the coming years. Ironically, as the strategic competition between the US and China escalates and leads to a surge in protectionism, the economic and strategic importance of RCEP – an FTA that incorporates China – is becoming more significant as a measure to counter unilateralism and protectionism. In addition, RCEP needs elements that address globalisation’s adverse effects and pitfalls, in areas such as the environment, labour rights, and a reduction in the disparity between the rich and poor.
Topic:
Development, Economics, International Trade and Finance, and Regional Cooperation
Political Geography:
Japan and Asia

5. RCEP Services Liberalisation: Key Features and Implications

Author:
Ramonette B. Serafica and Intan Murnira Ramli
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The Trade in Services Chapter of the RCEP Agreement establishes the rules for the progressive liberalisation of trade in the region and sets out regulatory disciplines to mitigate barriers to competition. Considered the most significant feature of the RCEP agreement compared to other FTAs of ASEAN is the scheduling of market access commitments using the negative list approach. Thus, an immediate challenge for members that initially adopted the positive list is the transition to the negative list scheduling approach. Furthermore, members will need to implement competitive and robust regulations in liberalising services. Developing countries, especially LDCs, might also face capacity constraints to fully take advantage of the market access given by the RCEP partners.
Topic:
International Trade and Finance, Regional Cooperation, Liberalism, and Progressivism
Political Geography:
Asia and ASEAN

6. Gendering the Indo-Pacific Dialogue: Opportunities for India and Australia

Author:
Priyanka Bhide
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
International Women's Development Agency (IWDA)
Abstract:
Viewing the confluence of the Indian Ocean and Pacific Ocean as a distinctive and interdependent strategic and economic space is fundamentally changing the way both India and Australia think about and examine their relationship with the broader region.i The Indo-Pacific as a strategic construct has grown in prominence in global geopolitical discourse, especially over the last five years. The EU, USA, and several countries in Europe have in place or are developing their own strategies for engagement in the Indo-Pacific region. The European Union collectively advocates for a ‘Free and Open Indo- Pacific’, designed to foster a ‘rules-based international order, a level playing field, as well as an open and fair environment for trade and investment, tackling climate change and supporting connectivity.’ii For France, the Indo-Pacific is at the heart of its vision for a stable multipolar order, and the Indo-Pacific is listed as a ‘priority and essential partner’.iii Germany too is making an active contribution to shaping the international order in the Indo-Pacific, so that it is ‘based on rules and international cooperation, not on the law of the strong.’iv The significance of the construct is varied for countries that are part of the region. The scope of the conversation in the Indo-Pacific is widening, with more diverse and varied perspectives being brought to the forefront. In this paper, against the backdrop of global Feminist Foreign Policy conversations, we focus on how Australia and India view the Indo-Pacific; marking the shifts in both countries’ approaches, along with bringing in important aspects of their bilateral relationship, highlighting how the Indo-Pacific has grown in significance to become a foreign policy priority, how both India and Australia have incorporated a gender lens in their actions, and what could be the avenues for Australia and India to apply such a lens in their collaborations.
Topic:
Foreign Policy, Regional Cooperation, Strategic Interests, and Gender
Political Geography:
India, Asia, and Australia

7. The Complexity Effect in U.S.-Turkey Relations: The Restructuring of the Middle East Regional Security

Author:
Devrim Sahin and Ahmet Sözen
Publication Date:
06-2022
Content Type:
Journal Article
Journal:
Uluslararasi Iliskiler
Institution:
International Relations Council of Turkey (UİK-IRCT)
Abstract:
This paper proposes a discussion of its core theoretical argument that the international order is more complex than the theories generated by traditionalist state-centric approaches and critical approaches, including the regional security complex approach. The complexity approach highlights the sensitive dependency of complex systems on the nonlinear feedback loops and dynamic interactions by which the longer term reactions to the behavior of actors could set off actions-reaction spirals. This path dependency is evident in the erosion of U.S.-Turkey relations which is a cause and a consequence of the realignment in the international system and the Middle East regional system.
Topic:
Security, Defense Policy, Diplomacy, Regional Cooperation, and Military Strategy
Political Geography:
Europe, Turkey, Asia, North America, and United States of America

8. Small State Dilemma: Cambodia Between The Asean And China In The Indo-Pacific Context

Author:
Khath Bunthorn
Publication Date:
02-2022
Content Type:
Journal Article
Journal:
Journal of Liberty and International Affairs
Institution:
Institute for Research and European Studies (IRES)
Abstract:
As a small state, Cambodia viewed the ASEAN and China as almost equally important pillars of its foreign policy. Amid the intense strategic competition in the Indo-Pacific, Cambodia faced the dilemma of how to maintain the ASEAN centrality without diplomatic cost to its key ally China, and how to balance its national interest with regional interest. In this context, the article aimed to explain the importance of the ASEAN as a cornerstone of Cambodia’s foreign policy, examine the motivations of Cambodia’s deep political embrace of the Asian giant, and underline its implications for the Indo-Pacific from the lens of small state foreign policy. The article was based on qualitative, empirical analysis that comprises primary and secondary data pertinent to the current topic. The article concluded that Cambodia leaned more towards China than it did towards the ASEAN, thus weakening its centrality in driving the broader regional architecture and that domestic politics was the primary driving force of Cambodia’s foreign policy towards that direction. At this juncture, Cambodia should step back from the present degree of its strategic engagement with China and look for ways to diversify its relations with other major powers while getting back on the democratic path and upholding human rights.
Topic:
Security, Diplomacy, Regional Cooperation, and Hegemony
Political Geography:
China, Asia, Cambodia, Indo-Pacific, and ASEAN

9. Assessing the Effects of Trade Liberalization With Third Countries: The Case of the Eurasian Economic Union

Author:
Simon Sngryan
Publication Date:
06-2022
Content Type:
Journal Article
Journal:
Journal of Liberty and International Affairs
Institution:
Institute for Research and European Studies (IRES)
Abstract:
The processes of objectively conditioned integration in the economic, political, legal, and institutional spheres of the Eurasian Economic Union (EEU) Member States took place step by step, starting from preferential trade agreements, passing to the customs union, the common market and other stages of integration. This process is accompanied by the gradual deepening of trade liberalization with potential partners. The selection of potential partners should be carried out through a comprehensive and detailed analysis of the structure and volumes of foreign trade of the EEU Member States (Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia) with third parties, their markets structure, existing customs regulation, trade barriers, and possible export potential. The research evaluated the EEU's possible enlargement effects on the Member States' economic indicators. The research aimed to assess the possible consequences of EEU expansion and signing free trade agreements, considering Pakistan, Korea, and Malaysia as potential trade partners. Modeling the effect of an FTA assumes horizontal zeroing of tariffs between partners. Then, using the GTAP model, a new state of general equilibrium was calculated corresponding to the changed parameters of customs and tariff regulation. In this case, most variables, such as change in GDP, production output, and export-import volumes, were estimated, manifesting the economic effect of trade liberalization.
Topic:
Economics, International Trade and Finance, Regional Cooperation, and Trade Liberalization
Political Geography:
Europe, Eurasia, and Asia

10. Potential Impact of RCEP and Structural Transformation on Cambodia

Author:
Shandre Mugan Thangavelu and Vutha Hing
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper examines the potential impact of the Regional Comprehensive Economic Partnership (RCEP) on the Cambodian economy in terms of trade, output growth, and employment. It also provides quantitative (structural gravity model estimation and simulation) and qualitative trade policy evaluation in terms of exports, output, and the structural transformation of the economy in global and regional value chains. The results highlight the importance of RCEP for the pandemic and post-pandemic recovery and the structural transformation of the Cambodian economy. The paper also provides key policy recommendations to fully maximise the benefits of RCEP for Cambodia for inclusive and sustainable growth.
Topic:
Economics, International Trade and Finance, Regional Cooperation, and Global Value Chains
Political Geography:
Asia and Cambodia

11. The Implications of the Regional Comprehensive Economic Partnership (RCEP) for Asian Regional Architecture

Author:
Shiro Armstrong and Peter Drysdale
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
East Asia’s Regional Comprehensive Economic Partnership (RCEP) came into force in 2022 as the world’s largest free trade agreement. RCEP was concluded, signed and brought into force in the face of major international uncertainty and is a significant boost to the global trading system. RCEP brings Australia, China, Japan, South Korea and New Zealand into the same agreement with the ten member ASEAN group at its centre. It keeps markets open and updates trade and investment rules in East Asia, a major centre of global economic activity, at a time of rising protectionism when the WTO itself is under threat. The agreement builds on ASEAN’s free trade agreements and strengthens ASEAN centrality. One of the pillars of RCEP is an economic cooperation agenda which has its antecedents in ASEAN’s approach to bringing along its least developed members and builds on the experience of capacity building in APEC and technical cooperation under the ASEAN Australia-New Zealand Free Trade Agreement. There is an opportunity to create a framework that facilitates deeper economic cooperation that involves experience-sharing, extending RCEP’s rules and membership at the same time as strengthening political cooperation. The paper suggests some areas that might be best suited to cooperation — that is confidence and trust building instead of or before negotiation — and discusses how non-members such as India may be engaged and the membership expanded. Options such as multilateralising provisions and becoming a platform for policy convergence and coordinating unilateral reforms are canvassed.
Topic:
Economics, International Trade and Finance, Regional Cooperation, and Architecture
Political Geography:
Asia and ASEAN

12. Restrictiveness of RCEP Rules of Origin: Implications for Global Value Chains in East Asia

Author:
Archanun Kohpaiboon and Juthatip Jongwanich
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This chapter aims to examine the restrictiveness of rules of origin (RoO) in the Regional Comprehensive Economic Partnership (RCEP) and other key multilateral free trade agreements (FTAs) in East Asia with a view to facilitating the operations of existing global value chains (GVCs). The analysis begins with dissecting PSRs in the RoO Chapter in these FTAs and quantifying them. The key finding is that product-specific rules in RCEP are the most flexible compared to the other multilateral FTAs and more facilitative to GVC operations. This is driven by RCEP-specific features, such as high intra-member trade and the member coverage. The main policy inference is that a full cumulation clause is needed in RCEP to allow a regional value content alternative to be in full effect. Harmonisation in RoO provision across these multilateral FTAs remains a challenge for ongoing negotiation. Monitoring the dynamics of RoO as well as the FTA utilisation is needed so that these multilateral FTAs could be a true stepping stone for trade liberalisation in the broader World Trade Organization multilateral trading system.
Topic:
Economics, International Trade and Finance, Regional Cooperation, and Global Value Chains
Political Geography:
Asia and ASEAN

13. Centrality and Community: ASEAN in the Regional Comprehensive Economic Partnership

Author:
Soo Yeon Kim
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper examines the Association of Southeast Asian Nations’ (ASEAN) role in the formation of the Regional Comprehensive Economic Partnership (RCEP) agreement. The RCEP project proceeded as trade governance has shifted from the multilateral trade regime under the World Trade Organization to free trade agreements and where the geopolitics of Asia has cast a shadow on the progress of regional integration efforts. The analysis in this paper focuses on ASEAN centrality, both as a concept and practice, in influencing the launch and progress of RCEP. Conceptually, ASEAN centrality is about the capacity of the 10-member group to help launch negotiations for the RCEP agreement and to shape its provisions for governing trade. In practice, the RCEP agreement consolidates and significantly unravels the numerous overlapping trade agreements between ASEAN, 38 in all between individual ASEAN members and its five RCEP partners, Australia, China, Japan, the Republic of Korea, and New Zealand. The paper also examines the relationship between the ASEAN Economic Community (AEC) and RCEP. RCEP provides for further tariff liberalisation between ASEAN members and its five RCEP partners and thus expands the zone of preferential treatment for goods exported from ASEAN and other RCEP members. RCEP also consolidates rules of origin requirements under one agreement, providing for diagonal cumulation and common rules of cumulation for agreement partners. The RCEP provisions can greatly facilitate production and trade along regional supply chains, thus accelerating the progress of the AEC as a single market and production base. Moving forwards, RCEP and ASEAN’s place in it, is likely to be shaped by challenges and opportunities from the Comprehensive and Progressive Transpacific Partnership and the Biden administration’s Indo-Pacific Economic Framework (IPEF) initiative. The ASEAN members with overlapping membership in the IPEF and RCEP will be pivotal in determining areas of cooperation. Regional integration will thus continue to be shaped by ASEAN centrality, and its progress will shape the ASEAN community.
Topic:
Diplomacy, Economics, International Trade and Finance, and Regional Cooperation
Political Geography:
Asia and ASEAN

14. Regional Comprehensive Economic Partnership: Economic Backgrounds of ASEAN and Its Dialogue Partners

Author:
Keita Oikawa, Fusanori Iwasaki, and Shujiro Urata
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
We overview the economic backgrounds of the countries participating in the Regional Comprehensive Economic Partnership (RCEP) negotiations and two Association of Southeast Asian Nations (ASEAN) Dialogue Partners – the United States (US) and the European Union (EU) – to understand their economic relationships before the signing of the RCEP and their economic interests in the RCEP. We discover that the 16 countries participating in RCEP negotiations vary in terms of economic size, income level, growth pattern, share of trade in the economy, and foreign direct investment (FDI) flows. Additionally, both lower- and higher-income ASEAN Member States (AMS) have received a large amount of FDI, in contrast to Japan and the Republic of Korea (henceforth, Korea), which have seen more FDI outflows from their countries than inflows. In terms of bilateral FDI inflows and outflows, as a centre for regional FDI, Singapore attracts FDI from developed countries (including the US and the EU) and reinvests it in India and other AMS. As an FDI hub, Singapore promotes liberalised regional markets to attract advanced country investors. By examining bilateral trade relationships, we find that as the centre of manufacturing in the world, ASEAN and China have participated in international production networks that also include Japan and Korea since 2000. Japan and Korea have maintained competitiveness in intermediate goods in the region’s production networks, while China notably exports final products to the US and the EU. Amongst the 16 countries participating in RCEP negotiations, India has not had a significant presence in the production networks. Indeed, India has expanded its bilateral trade deficit with China, which probably caused India to withdraw from RCEP negotiations to protect its manufacturing industry. Simulation results of the impacts of the RCEP, using a computable general equilibrium (CGE) model (Global Trade Analysis Project model), show that the countries participating in RCEP negotiations – particularly the less developed AMS – would gain greatly from lowering services trade costs and investment liberalisation. India would also gain significantly from the RCEP. In contrast, countries not participating in RCEP negotiations (the US and the EU) would experience small negative impacts of the RCEP through trade diversion effects.
Topic:
Diplomacy, Economics, International Trade and Finance, and Regional Cooperation
Political Geography:
Asia and ASEAN

15. Regional Comprehensive Economic Partnership, ASEAN’s Agency, and the Role of ASEAN Members in Shaping the Regional Economic Order

Author:
Huong Le Thu
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The Regional Comprehensive Economic Partnership (RCEP) – a mega free trade agreement comprising 15 countries – the 10 Association of Southeast Asian Nations (ASEAN) Member States and the dialogue partners (China, Japan, the Republic of Korea, Australia, and New Zealand) was finalised in November 2020. This paper looks at the process of the RCEP negotiations as an example of an ASEAN exercising agency. This paper also argues that RCEP asserts the agency of smaller powers within the trade network – ASEAN and its member states – particularly the more active role of individual members, including Viet Nam and Singapore amongst the most diplomatically supportive of the deal. The circumstances under which RCEP came to life is not trivial. Under Viet Nam’s ASEAN chair in 2020, and amidst the global pandemic, RCEP was finalised. RCEP’s political and geo-economic significance arguably can overtake its economic role. In the time of great power competition where China becomes one of the key economic centres of the world, and the United States (US) competes with a vision of Indo-Pacific, the region’s middle and smaller powers are anxious about becoming ‘collateral damage’, particularly in the process of US–China ‘decoupling’. The ASEAN countries have emphasised the reluctance to ‘choose a side’. RCEP shows that they can show agency in carrying out trade liberalisation at the time when the global leader of the US in this field is missing. A mega-trade deal can be successfully led by smaller, and even developing, economies.
Topic:
Economics, Regional Cooperation, Social Order, and Strategic Interests
Political Geography:
Asia and ASEAN

16. Trade Facilitation in RCEP Countries

Author:
Weixiang Wang and Shandre Mugan Thangavelu
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The trade facilitation under the Regional Comprehensive Economic Partnership (RCEP) is critical for regional trade and economic cooperation amongst the 15 member countries. This chapter examines the trade facilitation under RCEP using the available datasets on the trade facilitation index and compares the current trends in trade facilitation across RCEP countries in terms of four dimensions: the World Trade Organization’s Trade Facilitation Agreement, digital trade streamlining, ease of doing business, and trade logistics performance. The study finds that RCEP countries have improved significantly in trade facilitation measures, but they vary across the countries. For example, China should further enhance its performance in cross-border paperless trade, whilst the Association of Southeast Asian Nations countries should improve their performance in the documentary compliance of trade, the infrastructure of trade, and trade logistics performance.
Topic:
Economics, International Trade and Finance, Regional Cooperation, and Regionalism
Political Geography:
Asia and ASEAN

17. Opportunities and Challenges for ASEAN and East Asia from the Regional Comprehensive Economic Partnership on E-Commerce

Author:
Jane Kelsey
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The Regional Comprehensive Economic Partnership (RCEP) is a microcosm of the current tensions in negotiations on digital trade involving parties that have divergent positions on the digital economy, data, and regulation, including within the Association of Southeast Asian Nations (ASEAN) itself. It adopts a prudent approach that recognises the state parties need flexibility and policy space at the national and regional levels to develop of policy and regulation in the rapidly changing digital ecosystem and seeks to advance their collective interests through dialogue and cooperation. This paper contrasts that approach with the disciplinary nature of binding legal obligations that are enforceable by other states and their investors, as in the Trans-Pacific Partnership Agreement and similar recent treaties. The analysis of key differences focuses on matters of particular importance to ASEAN, such as local content and government procurement, data rules and flexibilities, financial data, source codes, and transparency. RCEP’s cautious approach enables ASEAN members to deepen their national and regional understanding of the opportunities and challenges these agreements present, whilst developing and implementing their own digital development strategies. Yet those good efforts may be undermined through the binding and enforceable trade in services rules.
Topic:
Economics, Regional Cooperation, Digital Economy, and Economic Cooperation
Political Geography:
Asia and ASEAN

18. The Investment Chapter in the Regional Comprehensive Economic Partnership: Enhanced Rules without Enforcement Mechanism

Author:
Henry Gao
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper examines the legal rules in the investment chapter in the Regional Comprehensive Economic Partnership (RCEP). It starts with an overview and summary of the main provisions in the chapter, followed by an assessment of the rules by comparing established free trade agreements (FTAs), especially the Comprehensive and Progressive Trans-Pacific Partnership. In particular, it notes that the chapter, whilst largely following the established approaches to investment in other FTAs, also includes important twists to the common rules to favour the host states. The last part discusses the conspicuous absence of an investor–state dispute settlement mechanism, its pros and cons, and wider implications on regional integration, then concludes with some thoughts on future developments.
Topic:
Economics, Regional Cooperation, Economic Cooperation, and Strategic Interests
Political Geography:
Asia and ASEAN

19. How Preferential are RCEP Tariffs?

Author:
Kazunobu Hayakawa
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This study discusses the extent to which the tariffs provided in the Regional Comprehensive Economic Partnership (RCEP) are preferential. RCEP does not necessarily adopt a common concession rule in tariffs, and the speed and depth of tariff reduction/elimination also differ by country. We show that RCEP tariffs become the best choice in trading some specific products with some specific countries in some specific years. Furthermore, there are some specific cases where the use of RCEP tariffs becomes beneficial even if RCEP tariffs are not lower. Therefore, we demonstrate that RCEP tariffs are beneficial in specific types of supply chains. In short, this study aims to enhance our comprehensive understanding of how preferential RCEP tariffs are compared with other types of available tariffs.
Topic:
Diplomacy, Regional Cooperation, Tariffs, and Economic Cooperation
Political Geography:
Asia and ASEAN

20. The Regional Comprehensive Economic Partnership Agreement and Europe: Impact and Implications

Author:
Haans Gunther Hilpert
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
In the first 2 decades of the millennium, European Union (EU) trade policy underwent historic changes, amongst them an explicit pivot to Asia. Along with continued firm support of the rules-based World Trade Organization (WTO)-centred multilateral trading system, important new directions in the EU’s trade policy included a turn to competitive bilateralism, a strong focus on values, an ambition to protect and to promote European trade standards as well as the politicisation of trade policy. Asia’s outwards looking economic growth, the increasing trade interdependence in Asia as well as the various bilateral and multilateral trade agreements in the region, notably amongst them the Regional Comprehensive Economic Partnership (RCEP), attracted the EU’s attention, and have helped cause and drive these changes. There was no particular Asian influence on the EU’s own regionalisation, however. Meanwhile, trade and investment relations between Europe and Asia have intensified greatly over this period. But the EU has been slow and late to formulate a comprehensive strategy for the Indo-Pacific region. In spite of some notable successes, the EU’s trade policy remains fragmented with differentiated approaches for each trading partner. Opinions on the RCEP’s relevance and importance for Europe are divided. RCEP sceptics point to the overall shallow nature of the agreement. RCEP optimists emphasise the future potential of trade and investment integration within the newly established RCEP economic area and warn of the discriminatory effects for Europe’s economy and businesses. So, Europe’s business will have to invest in the new RCEP free trade zone to overcome trade diversion risks and to benefit from the RCEP market integration. More worrying from Europe’s perspective is RCEP’s potentially negative policy impacts: a relative loss in the EU’s trading power, the risk of Europe being sidelined in the make-up of future trade rules, and RCEP’s future impact on rules based multilateralism and the WTO. The EU has various trade policy options with regard to the Indo-Pacific trade area and RCEP in particular. The most promising options include the conclusion of free trade agreements with as many RCEP member countries as possible, with the Association of Southeast Asian Nations as a group (as a region-to-region agreement), with other trading partners (from the Indo-Pacific or from other world regions), or with the Comprehensive and Progressive Agreement for Transpacific Partnership area.
Topic:
Diplomacy, Economics, Regional Cooperation, and Economic Cooperation
Political Geography:
Asia and ASEAN