Free-trade groups' rivalry heating up
Thai, other regional leaders planning challenge to US-led TPP partnership
THAI and other leaders of 16 Asean and Asia Pacific countries have pledged to conclude negotiations on the Regional Comprehensive Economic Partnership (RCEP) free trade and investment agreement by the end of next year. They hope to create a new "high-impact" economic grouping that will rival the US-led Trans Pacific Partnership (TPP), which currently excludes Thailand.
Prime Minister Prayut Chan-o-cha yesterday joined other leaders at the Asean Summit in Kuala Lumpur, Malaysia, in endorsing the "Joint Statement on RCEP Negotiations", which will lead to liberalisation of trade in goods and services as well as investment among the 10 Asean countries and Japan, China, Korea, India, Australia and New Zealand.
Altogether, the 16 RCEP economies will have a combined GDP of US$22.8 trillion, accounting for 29 per cent of world GDP, while RCEP's combined population of 3.5 billion will represent 49 per cent of world population.
On the other hand, the US-led TPP consists of 12 member countries, including four Asean members - Malaysia, Singapore, Brunei and Vietnam. Other TPP member countries are the US, Japan, Canada, Mexico, Australia, New Zealand, Chile and Peru.
TPP member countries have a combined GDP of $28.3 trillion, accounting for 38 per cent of world GDP, while its combined population is about 800 million, accounting for 11 per cent of world population.
In comparison, Thailand's economy is worth about $378 billion or about 0.49 per cent of world GDP while its population of 65 million is 0.9 per cent of world population.
During the related Asean-Japan Summit with Japanese premier Shinzo Abe, Prayut said both RCEP and TPP were crucial trade and investment groupings for the region that could be complimentary in helping to boost economic growth in Asia and the Pacific.
Since Thailand is not yet a TPP member, sources said Deputy Prime Minister Somkid Jatusripitak is expected to urge his Japanese counterpart to support Thailand's application for TPP membership when he leads a delegation of Thai economic ministers and businessmen to Japan later this month.
Earlier, Commerce Ministry and other state agencies expressed worries Thailand might lose foreign investors to other Asean countries if it does not join TPP in the near future. Thai exports to markets that are members of the TPP may be negatively affected due to the TPP's new rules of origin of products.
Meanwhile, Thai and other Asean leaders yesterday endorsed the 2015 Kuala Lumpur Declaration on the Establishment of the Asean Community, which would be effective on December 31 this year, and the Declaration on the Asean 2025: Forging Ahead Together based on three pillars of cooperation in political and security areas; in the economic area and in social and cultural areas.
Prayut also told Japanese premier Abe during the Asean-Japan Summit that Japan had played a leading role in deepening the integration of Asean via infrastructure development and other projects. He urged Japan to support the set-up of small-scale industrial estates and special economic zones along with the Thai borders with other Asean countries.
This would help spread out economic development to the provinces, create new jobs, reduce crimes and improve the livelihood of rural people, he said.
Separately, Prayut told his South Korean counterpart during the Asean-Korea Summit that Korean businessmen should boost their investment plans in Thai and other Asean countries, with emphasis on implementing the master plan on Asean connectivity.
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