Business has an important role to play in supporting the high level ambitions of free trade negotiations currently under discussion, according to Ms Deborah Elms, Head of the Temasek Foundation Centre for Trade & Negotiations (TFCTN) at the Nanyang Technological University in Singapore.
As the current round of the Trans-Pacific Partnership (TPP) negotiations end in Singapore this week, Ms Elms notes that the full potential of trade agreements, such as TPP, will only be realised with the support of the private sector.
“The TPP and other agreements like it will enable businesses – small and large – to grow their import and export activities by delivering faster, smoother shipments across borders through the harmonisation of customs and improving logistics networks. The resulting increase in intra-and-extra regional trade will lead to significant economic growth, create jobs, and provide consumers with a great choice of products.
“However, in some member countries, these benefits are not widely acknowledged. The private sector has an important role to play in highlighting the importance such deals can bring to businesses and consumers and their wider communities,” she said.
Seeking to open up key markets in the Asia Pacific region, the TPP is expected to benefit more than 658 million people and contribute to the region’s overall economic development, which currently covers a GDP of US$20.7 trillion.
While agriculture is often excluded from trade agreements, it is included in TPP, opening up significant growth opportunities for the food and beverage industry for the 12 member countries.
“The SPS chapter of the agreement has the potential to eliminate duplicative food testing and streamline cross-border import certification and risk assessment, aiding the movement of agri-food products between countries.
“The TPP negotiations are just one of many trade negotiations currently underway around the world, and the resolution of these negotiations could have a significant impact on other regional trade agreements such as the Regional Comprehensive Economic Partnership (RCEP).
“Getting a deal done on the TPP is extremely important because it will drive up the quality of trade agreements in other settings. Most notably, seven members in the RCEP are also involved in the TPP, which means they are expected to push for more ambitious targets in RCEP when the TPP is concluded.
“Even non-members in the RCEP have incentives to reach further agreements since they face the possibility of trade diversion to TPP members if the RCEP proves to be disappointing for businesses,” she said.
The RCEP, being negotiated among ASEAN member states and six dialogue partners – China, Japan, India, South Korea, Australia and New Zealand, will transform the region into an integrated market of more than three billion people with a combined gross product of US$17.23 trillion.
“The third round of talks, held in Malaysia in January, has helped accelerate the momentum for the next phase of RCEP discussions,” said Principal Advisor for the ASEAN Food and Beverage Alliance (AFBA), Pushpanathan Sundram.
“However, the countries’ willingness to make difficult choices could be affected if the TPP negotiations do not conclude, or get watered down at the end as TPP and RCEP are mutually reinforcing tracks for regional integration,” he said.
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