Prime Minister Hun Sen on November 2 reiterated a call on the 15 member states of the Regional Comprehensive Economic Partnership (RCEP), especially those lower on the development ladder, to step up cooperation and mutual support to maximise the benefits of the agreement.
The premier also confirmed that the bilateral free trade agreement (FTA), which was signed between Cambodia and South Korea last year on October 26, is set to enter effect on December 1, following lengthy delays.
He was speaking at the opening ceremony of the High-Level Forum at the 10th-Anniversary of the RCEP Agreement, which saw the launch of a new book by the Jakarta-based Economic Research Institute for ASEAN and East Asia (ERIA) titled “Dynamism of East Asia and Regional Comprehensive Economic Partnership (RCEP): The Framework for Regional Integration”.
The RCEP is the world’s largest free trade agreement (FTA), among the 10 ASEAN countries of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, as well as five additional Asia-Pacific nations: Australia, China, Japan, South Korea and New Zealand.
To make the best out of the deal, Hun Sen, who is ASEAN’s rotating chairman this year, suggested an RCEP secretariat be established as soon as feasible “considering all aspects and necessary conditions to ensure neutrality, independence, development opportunities and participation in regional integration.
“In this direction, I would also like to reiterate that Cambodia is still interested in setting up the RCEP Secretariat in Phnom Penh and is ready to provide necessary supports and provision.
“Despite being a less developed country, Cambodia is a highly open economy which strongly values [a] rules-based multilateralism system and regional and global economic integration which overall is aligned with the objectives of the RCEP Agreement,” he said.
The prime minister shared that Cambodia has signed bilateral FTAs with China and South Korea, noting that the treaty with the former went into force on January 1 – the same day as the RCEP did in the Kingdom and nine other countries.
“Cambodia is continuing to explore the possibility of establishing free trade agreements with other partner countries,” he affirmed.
But despite the strides made in the trade sphere, a myriad of complex issues threaten to undermine and set back progress towards established globalisation objectives, he cautioned.
“At present, the world is being surrounded by acute risks such as climate change, regional geopolitical tensions – especially the Russia-Ukraine war – as well as various trade and tech wars that have detrimental and immeasurable impacts, causing complexities and chaos to the regional and global development in the short- and medium-term.
“In this context, RCEP is an important mechanism and a strategy that demonstrates our unwavering commitment to safeguarding the rules-based multilateral free trade system, maintaining economic openness and upholding a spirit of cooperation,” he said.
In a previous interview with The Post, Song Saran, co-founder and CEO of Amru Rice (Cambodia) Co Ltd and president of the Cambodia Rice Federation, the Kingdom’s apex rice industry body, emphasised the importance of effectively utilising the privileges guaranteed under the RCEP.
He said that effective RCEP implementation “broaden and deepen economic linkages with the additional preferential Trade in Goods market access coverage notably into China, Japan and South Korea where tariff elimination and expeditious clearance of goods access and concessions would cut down cost for sectors supplying to these markets.
“Upon the ratification by participating countries of the RCEP Agreement, an opportune platform would be in place for business-to-business negotiations. For Cambodia, the RCEP provides a strong foundation for it to spur its economy and help overcome the challenges caused by the pandemic,” he said.
And citing figures by “major international institutions” to illustrate the sheer scale of the RCEP, Hun Sen told the forum that “a full-pledged implementation” of the deal “will boost trade volume by approximately $40 billion, increase real income by up to 2.5 per cent [and drive up] trade activities amongst RCEP members by 12.3 per cent.
“[It will also lift] an additional 27 million people into the middle class … by 2035 [and by estimates] increase global incomes by up to $263 billion.
“A study by ERIA in early 2022 shows that Cambodia’s gross domestic product [GDP] could rise by around two-to-3.8 per cent, exports would grow between 9.4 and 18 per cent, job opportunities would increase by 3.2-6.2 per cent annually, and tax revenue could increase by two-to-3.9 per cent, [while] overall investment could increase by around 23.4 per cent,” he said.