The Trans-Pacific Partnership (TPP) that has now become defunct provided a chance to all strata to make sure that it was deeply involved in the regional alliance framework taking place in the Asia Pacific region and continued with the process of economic integration with its regional counterparts. Therefore it is the geopolitical imperative of Australia to make sure that a leading role is played by it in the discussions related with researchers and the peculiarities of the Regional Comprehensive Economic Partnership (RCEP) that is led by ASEAN and in this way consolidating its position as the bastion for the governance of the deal as well as the intellectual property measures and environmental standards that continue to plague the RCEP till now. Under the circumstances it is necessary that its influence and experience is used by Australia in these areas for the purpose of making sure that it remains a valued partner during the negotiations and establishes itself as a leading an incredible power in the Asia-Pacific, particularly in view of the growing absence of the United States.
The RCEP can be described as a proposal for regional free trade area. In the beginning it involved the 10 ASEAN Member States and the nations that have present Free Trade Agreements (FTAs) with ASEAN. These were Australia, New Zealand, India, Japan, China and South Korea. According to the experts, RCEP has the potential of delivering high-quality and comprehensive, mutually beneficial economic agreement. Such agreement will allow the member states to form partnership to having a wide range of issues. These include but are not restricted to trade and investment taking place in goods and services, intellectual property and competition measures, economic and heuristic cooperation and disputes and their resolution mechanisms.
It is widely agreed that there are immense opportunities present. The 16 countries taking part in RCEP account for nearly 50% of the population of the world. At the same time these countries have 30% of global GDP and control nearly 35% of the global exports. These economies account for nearly 60% of the two-way trade taking place in Australia, 18% of its two-way investment and more than 65% of the exports of Australia. Under the circumstances, it can be stated that RCEP is going to be conducive for lowering the trade barriers with these nations and it will also help in securing improved market access to the exporters and investors from Australia.
However, there are conflicting priorities and competing interests that challenge the RCEP negotiations. These are the result of varying level of political and economic development and the member countries. On the other hand, there were a host of accords under the TPP between the governance for state owned enterprises, environmental standards, intellectual property transparency, data liberalization and the resolution of disputes. In comparison, such provisions are not present in the RCEP. It does not provide that the member states shall protect the rights of the laborer or to improve environmental standards as was provided by the TPP and governance and transparency related with the deal have been pointed out as a probable concern.
Therefore it is imperative that Australia should try to maintain a balance between its international trade objectivists and the desire of the nation to play a significant role as major negotiated regarding the wider governance and core concerns of the deal. For Australia it will be beneficial to make sure that the deal provides greater economic and investment freedom to Australia. Advocating for transparency in and regulations in major RCEP markets, allowing the investors in Australia to set up branches in partner countries 84 entry joint venture with a local partner and easing the FDI restrictions in some sectors or corporations will result in increasing the outgoing as well as incoming investment in Australia and at the same time it will also help the investors in Australia to achieve better control over their Investments, particularly in case of RCEP partner nations.
At the same time, it is also required that a balance should be maintained by Australia between the investor state dispute settlement clauses and simultaneously encouraging the investments and also promoting judicial and regulatory transparency along with the need for preventing Australia from prosecution by corporations from other countries. The effective management of the points of tension that are present between different countries need to be a priority for the government of Australia as a method of strengthening its position during the discussions.
One example of this point of contention can be given in the form of tariff reduction in India. Their willingness on the part of India to adopt single-tier tariff reduction approach is related with its demand for greater market access in some of the major RCEP partner nations. The single-tier tariff reduction is going to be beneficial for the industry in Australia as per Australian Advanced Manufacturing Council, particularly the dairy, food and wine sectors. This is particularly true for the dairy sector, in view of the recent decline witnessed in the price of milk, and also the reduction in demand from the importers of milk in Australia. On the other hand, a multi-tiered approach will result in Australia being on a much lower tier due to which it will become significantly costly to access the core markets of India.
On the other hand the other RCEP nations are not ready to further open access to the Indian service providers. India itself is required to maintain a balance between their need to gain market access to the other RCEP partner nations and at the same time acknowledging the threat that is posed by China, Japan and South Korea to the manufactured goods sector of India. Under these circumstances, Australia is required to make sure that it advocates in favor of single tier tariff reduction approach and at the same time, make efforts for encouraging the RCEP partner nations to liberalize, at least partially, their economy to the Indian service market.
The differences that are present in the priorities and the economic circumstances of a number of RCEP partner nations result in making the negotiations particularly tricky. Due to this reason, it becomes particularly significant that diplomatic tact is used by Australia for managing the discussions and positions itself as a key stakeholder during the negotiations.
The approach adopted by Australia for dealing with any impediments should be to encourage a transparent and open environment for the investors from Australia in major regional economies like China, India and Indonesia and also to encourage the member states to prioritize the liberalization of two-way investment and to achieve improved access for the investors from Australia in the key regional markets of Australia like agriculture, mining, manufacturing, fisheries and forestry. At the same time Australia is also required to play the role of a bastion to the governance of the deal, regularly working for increased transparency in communication and cooperation, defining control mechanisms and the dispute frameworks, advocating in favor of rigorous intellectual property rights and measures related with the protection of environment and also for the purpose of promoting a deal that can be beneficial for the wider collective instead of being marred by petty grievances. By doing so, Australia will be able to strengthen its position in the negotiations of the deal and also to make sure that it plays a significant part of wider social, economic and political architecture of Asia-Pacific during the coming years, irrespective of the fact that the United States has really decided to leave the region.
It is widely claimed that RCEP is ASEAN centered proposal related with regional free trade. Initially it would include 10 member states of ASEAN. The partnership is going to be built on and expand the present FTAs of Australia with ASEAN NEW Zealand. At the same time this partnership also complements the participation of Australia in bilateral FTAs that have been concluded with different nations. It can also be stated that RCEP can probably deliver significant opportunities for Australian Advanced Manufacturing Council in Australia. The 16 countries participating in RCEP account for nearly half of the population of the world, more than 30% of the GDP of the world and over quarter of the global exports. The RCEP negotiations have been launched with the objective of achieving a modern, high quality, comprehensive and mutually beneficial economic partnership agreement. This agreement is going to cover trade in goods, services, economic and technical cooperation, investment, e-commerce, intellectual property, competition, dispute settlement and other related issues. This partnership is a part of the strategy conducted by the government to lower trade barriers and also to secure better market access for the exporters of goods and services from Australia as well as the Australian investors.
Regarding the impact of RCEP on trade and commerce in Australia it needs to be mentioned that the countries participating in RCEP are regional neighbors and significant economic partners of Australia. At the same time, this partnership also provides a chance to strengthen regional trade and investment environment and also to benefit the consumers and boost regional economic confidence. In case of RCEP, it is required that Australia should seek to secure commercially meaningful market access for its investment, goods and services. It also needs to secure modern rules that can deal with contemporary business priorities like facilitating regional supply chains and also increasing the use of e-commerce. Similarly it is also required that ongoing cooperation mechanisms should be settled for supporting implementation and contributing to the economic reform environment in the region.
Therefore in the end, it can be stated that an attempt has been made to contribution to the debate going on regarding the impact of RCEP particularly on Australian Advanced Manufacturing Council in Australia. The relations between faith and environment have also been considered in context of RCEP. It is also being examined if the RCEP is going to have a significant economic impact on Australia. It is estimated that the 16 participating nations of RCEP are going to have a positive impact on real GDP. As compared to it, the non-RCEP economies, apart from Russia, are going to experience a negative effect on the real GDP. Moreover, the farm output is also expected to decline in Japan and the US. On the other hand it is expected to rise in Australia. Similarly the output in case of electric industry which is one of the largest sources of CO2 emissions is also expected to rise in case of Japan and India. Availability is expected to decrease in case of Australia as well as in China, United States and the EU.
It also needs to be noted that the Regional Comprehensive Economic Partnership (RCEP) is going to become a comprehensive free-trade area centered on ASEAN. The 16 negotiating countries are working hard for arriving at a substantial conclusion. It is believed that RCEP is going to make a significant contribution in Asian as well as global economic cooperation. It is expected that RCEP is going to become the second major trade agreement led by Asia after the exit of the United States in 2017 from the Trans-Pacific Partnership (TPP). The rest of the 11 members of TPP renamed it as the Comprehensive Progressive Trans-Pacific Partnership and generally retained its contents intact. It was signed in March 2018 and going to take effect in December 2018. The RCEP is also converging on an agreement between the members but they have very little chances of completing the deal in this year.
After it has been completed, the RCEP to is going to offer significant boost to the global trading system based on rules. The partnership is going to provide a free trade area for record books, which is huge in output and population. It is also the most ambitious agreement ever negotiated by the developing nations. Therefore the impact for the industry in Australia is also going to be significant. It has the potential of delivering significant opportunities for trade and industry.
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