This weekend the ASEAN Economic Ministers (AEM) was held in Kuala Lumpur. I provide below some highlights from the AEM and related meetings:
- RCEP – Malaysian minister of international trade and industry Mustapa Mohamed said that the RCEP parties had agreed to a tariff reduction modality for the agreement. According to Dato Sri Mustapa, 65% of tariff lines would be zero-rated immediately upon the RCEP agreement taking effect, with 80% of tariff lines at zero rates within 10 years. Although ASEAN and its FTA partners already had tariff reduction commitments, this was not the case for all RCEP partners, such as China, Japan and India. Dato Sri Mustapa said that details would be worked out at the next negotiating session in Korea in October, but that technical issues could lead to RCEP’s conclusion only in 2016.
- ASEAN+ FTAs – Dato Sri Mustapa also said that ASEAN’s FTAs with Korea and Japan would be expanded to include services and investments, and the FTA with China would be upgraded. This represents improved coverage for those FTAs, especially when compared with the ASEAN FTA with India, which does not cover investment (the ASEAN-FTA with Australia-New Zealand covers goods, services and investment). It also represents progress in RCEP, as that blanket agreement also includes services and investment.
- ATIGA – Indonesia said that it had the continued support of the other ASEAN members to exclude alcoholic beverages from the 0% duty rate under the ATIGA. Indonesia said that the exclusion was consistent with Article 8 of ATIGA provides a general exception from trade liberalization commitments for measures “necessary to protect public morals.”
- AEC -- The AEM noted that 91.5% of "prioritized" AEC goals had been met. This refers to the items which should be completed by end of 2015, not the total AEC Blueprint items (of which the completion rate has not been updated). A new AEC Scorecard report should be released at the November ASEAN summit, along with the ASEAN Trade Repository. A new AEC Blueprint 2025 will be issued at the November summit as well.