This Report details the Committee’s findings on the Regional Comprehensive Economic Partnership Agreement (RCEP).
RCEP is a plurilateral trade agreement between Australia and China, Japan, New Zealand, the Republic of Korea, and the ten members of the Association of Southeast Asian Nations (ASEAN): Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.
The proliferation of bilateral trade agreements in the Asia-Pacific has resulted in an effort to simplify the region’s trade architecture by negotiating plurilateral trade agreements that harmonise the rules governing trade between parties.
RCEP is an ASEAN-led agreement and reflects the interests and the positions of ASEAN. Negotiations for RCEP were launched by ASEAN at the East Asia Summit in Phnom Penh, Cambodia, in 2012.
RCEP is not a particularly ambitious trade agreement, and in terms of market access does not deliver much in the way of additional benefit for Australia. RCEP’s significance, however, lies in the broad composition of its membership—accounting for almost one-third of the world’s population and Gross Domestic Product (GDP)—its reinforcement of ASEAN’s regional leadership role, and its simplification and harmonisation of rules of origin and other trading standards which should facilitate growing supply-chain integration.
In particular, RCEP contains a single set of rules and procedures for Australian goods exporters to utilise RCEP’s preferential tariff outcomes across the region, and increases opportunities for Australian business to access regional value chains.
Similar benefits apply to trade in services, investment, intellectual property and electronic commerce.
A number of issues were raised during the inquiry and are dealt with in this Report.
Some inquiry participants were concerned that RCEP may impact the Government’s ability to regulate in the public interest, particularly in relation to aged care and implementing the recommendations of the Royal Commission into Aged Care Quality and Safety.
The Government reassured the Committee that RCEP would not prevent or impair the implementation of the Royal Commission recommendations. The Government emphasised that RCEP preserves the right of Parties to regulate the supply of services in order to meet policy objectives, including aged care services.
Some inquiry participants raised the recent coup and subsequent repression in Myanmar as a potential reason to delay ratification of RCEP, though the evidence heard suggested that no other country would be likely to follow Australia’s lead in this regard, and it was unlikely to have any significant impact on the behaviour of Myanmar’s military rulers.
The Committee is aware that the Joint Standing Committee on Foreign Affairs, Defence and Trade (JSCFADT) presented a report on Australia’s response to the coup in Myanmar in June 2021. In that report, the JSCFADT recommended that the Government further consider imposing targeted sanctions upon those responsible for the coup and subsequent repression.
The Committee encourages the Government to adopt this recommendation by the JSCFADT.
The Committee is of the view that, on balance, it would be in Australia’s interest to ratify RCEP, and recommends accordingly. The Committee also recommends the Government continue to pursue the restoration of civilian, democratic rule in Myanmar as a foreign policy priority, and consider making a declaration to this effect at the time of ratification.