Will RCEP Lower Our Cost Of Living?

 

Hanoi: 15 Asia-Pacific countries on Sun signed world's biggest free trade deal

huge coup for China in extending its influence

Regional Comprehensive Economic Partnership (RCEP) 

10 Southeast Asian economies, China, Japan, South Korea, New Zealand, Australia

members account for 30% of global GDP

deal sealed at end of Southeast Asian summit 

RCEP brings ray of light, hope," said Chinese Premier after virtual signing

multilateralism is the right way, right direction of global progress

agreement to lower tariffs and open services trade does not include US 

viewed as Chinese-led alternative to defunct Washington trade initiative (TPPA)

RCEP solidifies China's broader Belt and Road initiative

govts eager than ever to have positive economic growth

India pulled out over concerns about cheap Chinese imports

(OSTB : And let a billion Indians suffer expensive, lower quality Indian goods)

deal covers more than two billion people.

RCEP help shrink costs for companies 

lets them export anywhere in bloc without separate requirements for each country

environmental protection and labour rights are not part of the pact

China drafted rules of trade in the region

after years of US retreat, pull out of TPP

My comments :

Malaysia is a signatory to this free trade area. We have also signed other free trade agreements before including AFTA (Asean Free Trade Area).

But there are ways where Malaysia and other countries can get around not following these free trade agreements down to the letter. And for the AFTA there was no practical dispute resolution mechanism. 

But for the consumers in Malaysia - have prices of motor vehicles (as a relevant example)  gone down? The answer is no.  The Malaysian motor vehicle prices are still kept artificially high through tariffs, import duties, excise duties, APs etc with the end result being motor vehicle prices in Malaysia are among the world's highest.

Here is an interesting video. VW developed a single seater car that had a price tag of around US$600 only !! That is about RM2,400. This is cheaper than a kapchai motorbike price in Malaysia. 

But here is the catch - this video above is 11 years old !!  This is old technology already. We never even saw this RM2,400 single seater VW. Malaysians can drive Proton and Perodua. 

It does not matter whether this car was popular or not popular. Whether it could sell or could not sell. That choice is for the consumer to decide. We the consumers decide if we want to buy a single seater VW for RM2,400 or not. 

The purpose of the country becoming independent on 31st August 1957, the purpose of signing the RCEP etc is to give Malaysians more freedom, more independence, more choices, that we pay no more or no less than any other person in the world for our motor vehicles (for example).

Has that happened? The answer is no.