Source: Malaysia won't sign RCEP if it doesn't get fair deal

Despite being the world's largest trade pact, Malaysia will not sign the Regional Comprehensive Economic Partnership (RCEP) if it does not constitute a fair deal, says a source involved in the negotiations.

Asean countries, including Malaysia are aiming to conclude the pact in 2019, and Putrajaya will continue with negotiations next year.

"But, if Malaysia feels that it is not getting a fair deal, then we cannot possibly agree to sign in 2019," the source told Bernama.

Although there has been significant process in the negotiations, the deal has to be mutually beneficial to all parties, taking into consideration the different levels of economic development, while being comprehensive and balanced, the source said after the Second RCEP Summit in the Island City on Wednesday.

Launched in 2012, the RCEP is the world's largest economic pact, covering nearly half the global economy.

It involves 16 nations, the 10 Asean- member countries, plus six Asia Pacific states, namely Australia, China, India, Japan, South Korea and New Zealand.

Negotiations for the free trade agreement were initially scheduled to be concluded during the 33rd Asean Summit here.

Malaysia had raised concerns, one of which is market access, said the source who requested anonymity.

"In any free trade agreement, we should reduce or eliminate tariffs. So, when we are supposed to reduce tariffs, the other party should also reciprocate.

"Of course, we cannot expect all the reductions to be at the same level, as the economies of the 16 countries are also at various levels.

"But, if I am giving you 80 percent market access and you only give 60 percent to us, it is unfair. But, if it is like 75 percent versus 72 percent, that is agreeable. So, the differences in market access cannot be too wide a gap," the source added.

The source also stressed that the agreement cannot favour of certain countries at the expense of the others.

"The RCEP is the 10 Asean countries plus dialogue partners. It should be able to produce economic benefits to all Asean countries plus the dialogue partners. But, if the agreement is skewed towards the dialogue partners, then it is not fair anymore.

"I think I can also speak on behalf of the other Asean-member countries, particularly the Least Developed countries (LDCs)," the source added.

Three Asean countries, Cambodia, Laos and Myanmar, are classified as LDCs.

Bernama understands that during his intervention, Prime Minister Dr Mahathir Mohamad stated that while being part of the partnership was highly dependent on trade, this did not mean that the country needed to compromise on its sovereignity and national agenda

Meanwhile, in the joint leaders’ statement on the RCEP negotiation, it was stated that they were determined to conclude a modern, comprehensive, high quality, and mutually beneficial deal in 2019.

“We welcome the conclusion of seven chapters to date, namely the chapters on economic and technical cooperation, small and medium enterprises, customs procedures and trade facilitation, government procurement, institutional provisions, sanitary and phytosanitary measures, and standards, technical regulations and conformity assessment procedures. Five were concluded in this year alone,” it said.

However, the leaders also noted there was a need to heighten this momentum to bring all remaining chapters and appendices to conclusion, which includes market access and rules negotiations are part of 

“We reiterated the value of continued engagement with various stakeholders of the RCEP, including representatives from the business sector, NGOs and other stakeholders, in ensuring that RCEP remains inclusive,” the statement said.

- Bernama