RCEP is a lifeline for ASEAN: Experts

Amid global challenges and uncertainties, experts said that the regional grouping should leverage on the world's largest trade pact, the Regional Comprehensive Economic Partnership, or RCEP.

RCEP is a free-trade agreement between China, Japan, South Korea, Australia, New Zealand and the ASEAN member states.

According to World Bank data from 2020, the 15 participating countries account for about 29 percent of the global population or 2.3 billion people.

These economies boast a combined GDP of $25.9 trillion, accounting for 30.6 percent of the world's GDP, and they represent $10.09 trillion, or 28.33 percent, of global merchandise trade.

During the 57th ASEAN Economic Ministers' Meeting on Sept 23, meetings were held between these ministers and representatives of the RCEP.

Economist Yeah Kim Leng of Sunway University, Malaysia, pointed out that the pursuit of unilateral import tariffs and the United States-centric economic agenda would mean that it is crucial for all other countries to step up trade and economic cooperation.

"This is not just to counter US policy shifting away from free trade and multilateralism, but also to deepen economic relationships to offset the loss of US markets and to stabilize global supply chains," he said.

Malaysia's current leadership role in ASEAN offers not only the opportunity to expand trade and investment among member countries, but also to integrate ASEAN with other free trade agreements where Malaysia is a member.

As such, he said the RCEP is particularly important since it is the largest free trade bloc.

Yeah said concrete actions to expand trade and investment will be crucial to offset the uncertainties caused by Trump's tariffs and the expected decline in trade with the United States.

At the same time, he said it is important for Malaysia to nurture a wide range of trading partners and arrangements.

Pushing agenda jointly

"ASEAN is a natural focus for Malaysia to leverage and use its position as chair of ASEAN to ensure there is momentum in closer trade links.

"Since ASEAN is a key group in RCEP, which includes major trading powers around Asia, pushing the trade agenda jointly is very important to maintain export markets given current economic uncertainty," he said.

With the ASEAN Summit set to take place in late October, it is crucial to have some wins to announce on trade and "hopefully to make further progress on long-term tariff reduction", he said.

Bank Muamalat Malaysia Berhad Chief Economist, Mohd Afzanizam Abdul Rashid, said the RCEP could act as a cushion against tariff impacts and help ASEAN economies diversify their markets.

"RCEP essentially involves major economies such as Japan, China, Australia, New Zealand and South Korea. Hence, we can hope that there will be technology transfers, more opportunities for access to new markets and improved trade linkages," he said.

"It will be a catalyst for better coordination and above all, the buy-ins."

Economist Geoffrey Williams said that, as protectionist policies are being amplified, countries should collaborate on rule-based international trade, centered on fair trade as the driving force for global integration.

He named e-commerce as one tool that has become a catalyst for international trade.

The Star, Malaysia