Tuesday, March 4, 2014

Bangladesh Considers Joining RCEP Talks

This week the Financial Express in Bangladesh reported that the South Asian country was considering joining ASEAN’s Regional Comprehensive Economic Partnership (RCEP) free trade agreement talks.  The report indicated that Bangladesh’s joining the RCEP talks was suggested by the local representative of the Japan International Cooperation Agency to the Bangladeshi central bank.  Bangladesh’s Ministry of Commerce is now conducting a feasibility study.

Although it is probably not realistic to expect Bangladesh to join the ongoing RCEP talks, which are scheduled to end by the close of 2015, the idea of Bangladesh eventually joining is not far-fetched.  After all, fellow South Asian country India is already part of the RCEP talks as well as part of the BIMSTEC regional grouping which includes ASEAN members Myanmar and Thailand (and which itself trying to achieve a free trade agreement).

The article also belies a commonly held assumption (particularly in the US) that the RCEP is a China-organized effort.  Rather, the conceptualization of RCEP was largely driven by Japan and Japanese-supported entities.  The initial benefits of harmonizing the ASEAN FTAs will accrue to the Japanese manufacturers which are already operating at a high level of economic integration in ASEAN.  Of course, China and other trading partners of ASEAN will eventually benefit as well.

The possibility that other Asian economies could participate in the RCEP process (such as Taiwan and Hong Kong) illustrates the potential long-term influence of regional economic integration in Asia.  The RCEP process is not as ambitious as the Trans Pacific Partnership (TPP) talks, but at this point (due to political difficulties in the US Congress regarding American negotiation and implementation of any resulting agreement) the RCEP looks more likely to achieve its target goals.