Regional Comprehensive Economic Partnership (RCEP)
RCEP builds on New Zealand’s already strong relationships in Asia, and will open up more opportunities for New Zealand businesses in these fast growing economies.
- Why it’s a priority for NZ
- What are the potential benefits?
- Timing for negotiations
- How to get involved
There are 16 countries involved in RCEP: the 10 members of ASEAN—Brunei-Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam plus the six countries with which ASEAN has free trade agreements—Australia, China, India, Japan, Korea, and New Zealand. These six countries are known as the ASEAN Free Trade Partners (AFPs).
RCEP countries have a total population of more than 3 billion, a total GDP of around $US23 trillion (2015 IMF figures), and they account for about 27% of global trade (2014 UNCTAD figures).
Collectively, in the year to June 2016 RCEP countries represented 55.4% of New Zealand’s total trade (imports and exports of goods and services; source Statistics NZ), and took 56% of New Zealand’s goods exports and 52.6% of New Zealand’s services exports – a combined value of approximately NZ$39 billion worth of exports.
New Zealand offers what’s in demand in these countries – a trusted food supply, quality education services in English, a safe tourism destination, and expertise in agriculture, engineering, renewable energy and commercial services. New Zealand relies on these markets for manufactured goods such as vehicles, electronics, clothing and affordable tourism.
RCEP has the potential to increase business across the board in New Zealand. It’s a comprehensive agreement, covering trade in goods, trade in services, investment, economic and technical cooperation, intellectual property, competition, e-commerce (digital trade), dispute settlement/legal and institutional issues. The potential benefits of this type of agreement are:
- better market access for New Zealand businesses throughout Asia
- elimination of tariffs for exporters
- more consistent ways for dealing with sanitary and phytosanitary measures, technical barriers to trade, customs procedures, and rules of origin
- more opportunities for New Zealand’s service sector
- improved protection for investors to help more investment between the countries
- deepening economic integration between countries to enable businesses to operate more effectively and efficiently throughout the region
- working to make the region’s “noodle bowl” of rules operate better together (e.g. rules of origin).
New Zealand already has FTAs with some of the countries involved in RCEP, and has concluded TPP negotiations with several others. Existing FTAs will remain in place, and RCEP will help create new FTA relationships where they do not already exist. It may also be an opportunity to improve at the margin on some of our existing agreements.
The 16th Regional Comprehensive Economic Partnership (RCEP) Trade Negotiating Committee (TNC) meeting and related meetings were held from 2 to 10 December 2016 in Tangerang, Indonesia. Parallel meetings were held by the Working Groups on Trade in Goods and Trade in Services including their respective Sub-Working Groups, as well as the Working Groups on Investment, Intellectual Property, Competition, e-Commerce, and Legal and Institutional Issues. Expert consultations on Trade Remedies and Government Procurement were also held.
The Meeting was opened by Lukita, Minister of Trade of Indonesia, on 6 December 2016. The Minister emphasised that recent global developments, including the subdued economic environment, the rise of protectionism, and recent questioning of globalisation and trade, have made it all the more important for RCEP Participating Countries (RPCs) to progress RCEP negotiations towards a positive and timely conclusion. The Minister urged all RPCs to share collective responsibility in moving the negotiations forward.
The Meeting agreed to build on the outcomes of the 2nd Intersessional RCEP Ministerial Meeting held on 3-4 November 2016 in Cebu, Philippines as the basis to intensify negotiations, especially in the core market access areas of trade in goods, trade in services and investment. The further progress achieved in the final negotiating round for 2016 maintains momentum to keep negotiations on a good track in 2017 towards a swift conclusion.
The chapter on Small and Medium Enterprises (SMEs) was concluded during the 16th round. This is the second chapter to be concluded to date after the conclusion of the chapter on Economic and Technical Cooperation at the 15th round in Tianjin, China.
Stakeholder events with business and civil society organisations were also held during this round. In particular, the East Asia Business Council (EABC) organised the Business Stakeholder Workshop on RCEP Negotiations on 4 and 5 December 2016 and presented its outcomes and recommendations to the negotiators. Likewise, negotiators had a stakeholder engagement session with representatives from 13 international, regional and local civil society organisations and took note of their views and concerns on a wide range of issues.
The 17th round of RCEP negotiations is scheduled from 27 February to 3 March 2017 in Kobe, Japan.
Summary of Auckland round, June 2016
The thirteenth round was held in Auckland in June 2016. The meeting was opened by Todd McClay, Minister of Trade of New Zealand, and negotiators were welcomed with a pōwhiri by the iwi Ngāti Whātua. Minister McClay challenged delegations to be more ambitious so that RCEP delivers on the vision of a modern, comprehensive and high quality agreement. Read the Minister of Trade’s press release here (external link).
Parallel meetings were held by the Working Groups on Trade in Goods and Trade in Services including their respective Sub-Working Groups, as well as the Working Groups on Investment, Economic and Technical Cooperation, Intellectual Property, Competition, e-Commerce, and Legal and Institutional Issues. Expert consultations on Trade Remedies and Government Procurement continued.
All RCEP countries have now submitted initial offers for trade in goods and trade in services, as well as initial reservation lists for investment. Initial requests have been submitted in goods and services by most countries, and some requests have been submitted in relation to initial reservation lists in investment.
Trade in services market access negotiations continue on a bilateral and plurilateral basis. Consultations and engagement on investment liberalisation continued on the basis of a negative list structure.
In goods, negotiators continued to engage in discussions on the way forward, in light of the statement last year that leaders were looking forward to the conclusion of RCEP negotiations in 2016. The negotiations also advanced consideration of how to respond to concerns expressed by business in many countries about non-tariff measures.
A number of events were organised to allow stakeholders to engage with negotiators on a range of RCEP issues, as well as on the specific topics of trade in services and non-tariff measures. The New Zealand delegation trialled a Q&A event for New Zealand and some international stakeholders, which was live-streamed, and where New Zealand’s Minister of Trade and TNC Lead answered questions submitted by email and Twitter. The New Zealand delegation also facilitated, through the respective chairs of the working groups on IP, E-commerce and Investment, invitations for interested delegates to attend separate events organised by some stakeholders on those areas.
Question and answer session
The Joint Leaders’ Statement on RCEP issued on 8 September 2016 in Vientiane, Laos instructed officials to further intensify negotiations in a cooperative manner for the swift conclusion of the RCEP negotiations. RCEP Participating Countries (RPCs) are also committed to deliver on an agreement that meets the quality objectives of a modern, comprehensive, high-quality and mutually beneficial agreement as envisioned in the Guiding Principles and Objectives for the RCEP Negotiations (‘Guiding Principles’).
MFAT negotiators are keen to hear from businesses or individuals who are facing barriers to this market. This includes companies that are not exporting now, but plan to enter the market.
Examples of common barriers New Zealand businesses face offshore are:
- high tariffs, eg duties imposed on items at the border that add significantly to the price point in the market
- surcharges and duties required at the border
- sanitary and phytosanitary measures, e.g. restrictions for animal or plant material to be allowed across the border
- technical barriers to trade (regulations or officially endorsed standards, industry standards, conformity assessment requirements e.g. testing), import licensing, customs or difficulty in finding out about relevant local laws and regulations
- restrictions on individuals, eg difficulties with recognising qualifications or obtaining business visas, requirements to obtain local licences
- restrictions on investors, eg requirements to operate in joint ventures with local partners, requirements to employ locals or restrictions on the ability of New Zealanders to be transferred to work in subsidiaries or affiliates, local representation requirements for boards of directors, restrictions on the ability to invest in a new enterprise or invest equity
- financial or business restrictions, eg restrictions on supplying services from New Zealand (including via the internet), difficulties competing with local firms that benefit from government preferences, complex and discriminatory local regulations.
We also want to hear from New Zealand companies that are concerned about the effect of an increase in imports as a result of New Zealand agreeing to eliminate our tariffs.
To give feedback or for more information about the RCEP negotiations, contact us by:
Coordinator, RCEP FTA
Ministry of Foreign Affairs and Trade
Private Bag 18901