16 October
Myanmar became a member country of ASEAN in 1997 and cooperated with other member countries according to systematically drawn up cooperative frame. ASEAN Free Trade Area-AFTA was established in 2018 and Myanmar also participated as a member country toward establishing five ASEAN+1 free trade areas (FTAs) with six dialogue partner countries of China, India, Korea, Australia and New Zealand.
As all countries wishes for the establishment of an agreement that would benefit more all the ASEAN member countries, with the aims of gaining additional benefits from deepening economic cooperation with ASEAN+1 free trade area countries and to have an opportunity to participate fully in a comprehensive economic partnership in the region, discussions and negotiations were conducted. A decision was made at 21st ASEAN Summit held in Phnom Penh, Cambodia on 20 November 2012 to start negotiation for Regional Comprehensive Economic Partnership – RCEP.
The aim was for RCEP to have a more complete and quality economic cooperation agreement than Free Trade Agreements signed among each ASEAN countries. On the other hand it was also believed that it’ll increase economic cooperation.
Discussions were started in 2013 but during the more than six year period, discussions and coordination on the agreement was not concluded for many reasons. As known to all, today’s world economic situation can be said to have reached a critical period with the existence of various forms of trade wars, protectionism and nationalist policies in trade. At this situation there was a requirement to strengthen international trade, maintain and show the importance of ASEAN in the world economic situation. As such ASEAN leaders had issued guidelines again at 34th ASEAN Summit meeting held in Bangkok, Thailand on 2019 June to complete discussions and negotiations on RCEP during 2019.
Considering the differing development situations
In coordinating RCEP, different development situation of member countries were considered and coordination conducted for the benefit and involvement of all. In addition to special and diverse opportunities, other appropriate concession granted in the ASEAN+1 FTAs of ASEAN-Japan ASEAN-China, ASEAN-India, ASEAN-Korea, ASEAN-Australia and New Zealand, Additional Flexibility for less developed countries were used in discussions and negotiations. It was agreed for Myanmar, Cambodia and Laos not to conduct as other countries in some matters. In some matters, discussions were held to relax to a certain extent the preparation time to concede to the agreement.
RCEP was discussed and negotiated to open up the market, smoothen, clear and ease international trade. Myanmar as well as ASEAN countries will have more opportunities to enter into world’s manufacture market.
As more markets were opened to product, service and investment, trade obstacles were reduced and member countries will have more transparent trade and investment.
Because it was in a group of countries that were less developed, Myanmar receive special, preferential and additional concessions. This means that Myanmar was exempted from conducting some matters, was given more preparation time for some matters and will conduct some matters as other ASEAN countries do.
On the other hand discussions were held to obtain technical assistants and to participate in capacity raising programmes. Pledges included in RCEP will be included accordingly in enacting and drawing up laws that Myanmar do not have or to amend existing laws. It’ll support in enacting laws that are appropriate to increase economic cooperation from regional level to world level.
Myanmar’s inclusion in RCEP will allow it to participate and cooperate as other member countries in a rule based trade system and will be able to avoid the unnecessary obstacles and hindrances against trade and investment put up by powerful countries citing political, human rights and other issues.
China and India representing nearly half the world’s population and market were also members of RCEP allowing Myanmar to have access to a huge market. In addition to this inclusion of technically advanced and economically developed Asians countries like Japan, Korea, Australia, New Zealand and Singapore will provide more opportunities for inflow of responsible and quality investments that sticks to the letters of the agreements.
Expected to become the biggest trade bloc
The 16 participating countries in the RCEP represent nearly 47.4 per cent of 2018 world population. It also represents 32.2 per cent of world economy, 29.1 per cent of world trade and 32.5 per cent of world’s foreign investment. It was expected to become one of the world’s biggest trading blocs. RCEP will not stop with these 16 countries as Chile, Canada and Hong Kong were also showing interest to become future members of RCEP with many more countries showing similar interest.
Countries participating in RCEP must provide customs exemption on 92 per cent of trade items but for Myanmar, Cambodia and Laos the customs exemption will be on 86 per cent of trade items. In addition to this, on the time when the RCEP came into force, other member countries will have 65 per cent of the products custom duty free while Myanmar was permitted to have only 30 per cent of the products to be custom duty free. In ten years other countries will have 80 per cent of the products custom duty free while Myanmar will have the same percentage of customs duty free products only in fifteen years time.
To prevent products from non member countries of RCEP entering into RCEP market custom duty free, rules and regulations for Rules of Origin certifying the product was from RCEP member country had been drawn up. Only products that are certified as from RCEP member countries will be permitted to enter custom duty free into RCEP market.
In the FTAs currently implemented, Certificate of Origin-CO issued by the country of origin was being used. In RCEP, this system as well as usage of Self-Declaration System of Origin will be used greatly smoothening and easing trade among member countries.
Designating of RCEP country of origin will also include regulations for value adding or combining of products from the 16 member countries allowing the value of the products to be raised along the whole supply chain while allowing the attracting of investment into the country using this opportunity. As Myanmar’s geological position was in a strategic place there will be more opportunities for it.
More opportunities to develop Myanmar export products
Economically strong member countries will be able to invest more in Myanmar while Myanmar will also have more opportunities to trade with member countries. As there are programmes to cooperate with Myanmar small and medium enterprises to produce quality products, Myanmar will be able to develop its export products using the technical assistances and cooperation effectively. Myanmar products will have the opportunity to enter into regional as well as world market in accordance to rules and regulations. Participating in a rule based trade system will be a challenge. However being a member of world biggest trading bloc RCEP is more of an opportunity for Myanmar. It will definitely support Myanmar’s socio economic development.
By Saw Kalyar (MIFER) (Translated by Handytips)
