Regional Comprehensive

Economic Partnership (RCEP)

and China ASEAN Free Trade
Area (CAFTA) : Opportunities
and Challenges
Putri Rakhmadhani Nur Rimbawati, MA

RCEP Updates

The 12th Round of Negotiation of Regional

Comprehensive Economic Partnership (RCEP) Held
in Perth. The 13th round of negotiation will be held
on June 12-18, 2016 in Auckland, New Zealand.

Opportunities of RCEP

RCEP, as led by ASEAN, is expected to entrench

its centrality in a wider Asia-Pacific regional
architecture.
RCEP was expected to demonstrate ASEANs
leadership in bringing together its own ten
members and external partners for economic
growth, development and harmonization.
RCEP, based on ASEAN ++ formula was viewed
as a good compromise between EAFTA and
CEPEA.
Economically, if successfully done by 2015, RCEP
as a grouping is likely to generate a GDP of US$
26.2 trillion (32 per cent of the world), covering
about 3.5 billion people (48 per cent of the world)

Challenges in RCEP Negotiation

RCEP is the first of its kind and has no precedence to

emulate.
RCEP involves three different dynamic among its sixteen
members ten ASEAN members, ASEAN and FTA partners
and six FTA partners.
The six FTA partners that may not have existing
comprehensive trade agreement with one another
RCEP negotiation is also challenged by the difference in
developmental stages and accordingly differences in
interest among the negotiating partners
The flexibility clause built into the RCEP framework could
be a boon or bane for RCEP
As the current FTAs vary considerably from each other, it
leads to concern over modality and the eventual quality of
the agreement

RCEPs Feature

Limited coverage: trade in goods, trade in

services, investment, economic and technical
cooperation, intellectual property, competition,
dispute settlement. So, its standard is not so
high as TPP.
Flexibility, special and differential treatment, so
that most members can accept it .
Other features ASEAN+1++, consistent with
WTO rules, open accession.

RCEPs Difficulties

Big gaps in economic liberalization among 16

members: developed & developing
Big gaps of liberalization level and areas
between ASEAN-India FTA and the rest 4
ASEAN+FTA
ASEAN focuses on AEC establishment by the
end 2015, so it is hard for it to push RCEP
process.
Political problem
Technical Problem: market access and others

China ASEAN Free Trade Area

(CAFTA)

The Framework Agreement is an umbrella

agreement which provides general provision on
the establishment of an ASEAN-China FTA (ACFTA)
within 10 years by pursuing:
progressive elimination of tariffs and non-tariff
barriers;
progressive liberalisation of trade in services and
investment;
strengthen trade facilitation measures;
and economic cooperation in areas of common
interest.

RCEP and CAFTA: which is better?

RCEP VS CAFTA

RCEP

CAFTA

Comparisons

RCEP is led by ASEAN to gather all

separate no-ASEAN FTAs
Born out of ASEAN+1 FTAs with
China, India, Japan, South Korea,
Australia, and New Zealand

The idea of regional economic

cooperation was initially
proposed by then-Chinese Prime
Minister Zhu Rongji in 2000.

Characteristics

Aims to form an integrated

regional economic agreement
that are deeper than the existing
FTA co-operations and support
equitable economic development

implemented in the midst of

ASEAN countries seeking to
strengthen the
economic foundation of ASEAN
as well as ASEAN's interest in
playing a more significant
regional role in achieving
regional stability.

Concerns

Building on ASEAN way and

different treatment depending on
level of members development
could contribute to slow progress.

A free trade area between the

two sides is a potential
means of strengthening the
economic partnership.

Chinas Choice

Firmly support ASEAN-led RCEP negotiations,

support ASEANs centrality in the regional
integration
Support AEC
Strengthen CAFTA, update CAFTA
Be ready to join TPP negotiations
Support FTAAP and any proposal which is
beneficial to the regional integration
Push domestic economic reform and set up a
more open and free economic system

China-ASEAN Economic Cooperation

Indonesia is a member of

CAFTA and RCEP, like China.

In this connection, China
and Indonesia are standing
on the same starting line in
the regional integration.
So, the both countries can
cooperate each with other in
the many areas and levels.
In the recent 25 years,
China-ASEAN Economic
Relations develops very
rapidly.

Terima Kasih

Putri Rakhmadhani Nur Rimbawati