Page 58 - FoodFocusThailand No.179 February 2021

SURF THE AEC
SURF THE AEC

Get to Know RCEP:

The Future of Trade in Asia

RCEP Set to be Enforced…But Close Attention Must be Paid to the US Stance,
which Could Affect Thailand Ahead

Presently, Thailand is already a member of the Regional In addition, KResearch views that the CPTPP, which includes the
Comprehensive Economic Partnership (RCEP), which is the world’s US as a member (CPTPP+US), is possible under the newly elected
largest Free Trade Agreement (FTA). This is most welcome news US administration, but not over the near term. It is expected that Joe
because the RCEP will likely help enhance Thailand’s competitiveness Biden will accelerate the efforts to combat the Coronavirus (COVID-19)
over the short term, although the country’s long-term competitiveness pandemic and revive the US economy soon after he assumes office.
is undermined by the fact that Thailand’s rivals that are also members He may then resume international trade negotiations, but such
of the RCEP and other FTAs that Thailand is not a member, in particular processes could be impeded by the US Congress; therefore, the US
the Comprehensive and Progressive Agreement for Trans-Pacific will likely be able to submit its CPTPP membership application in the
Partnership (CPTPP). In addition, close attention must be paid to second half of 2021 at the latest. If the US can rejoin the CPTPP,
whether Joe Biden, once sworn in as the 46 president of the US, will Washington will have to comply with the terms and conditions, which
th
lead the US to rejoin the CPTPP, which was initiated by former US have already been enforced. Although the US will not benefit much
President Barack Obama, or not. from opening its market under the CPTPP, there are numerous
While the RCEP and CPTPP are said to have helped bolster the privileges that it can enjoy. The CPTPP+US, therefore, is highly likely
competitiveness of their members, Thailand is losing its economic for Washington as it would be better than negotiating new FTAs with
competitiveness to its rival Vietnam in all dimensions. It cannot be Asian countries, though it has to submit a member application per
denied that Vietnam’s behind-the-scene success is due to its FTAs the set procedures.
with the EU, Russia (CPTPP) and recently the RCEP, which has helped As Thailand is already a member of the RCEP, while Thailand’s
upgrade its status to a production base that can integrate global supply rivals have not entered into the FTAs with the US, and the CPTPP+US
chains. has yet to materialize, this is the right time for the relevant Thai
KResearch is of the view that Thailand’s RCEP membership will authorities to make preparations for Thai businesses and put in place
not create any significant change to the country although the RCEP relief measures for all sensitive sectors so as to upgrade them on par
has several advantages, including the fact that it helps deepen the with the required international standards. Regardless of whether
integration of Asian supply chains, and aid Thailand in maintaining its Thailand will enter into any trade agreement in the future, or not,
competitiveness over the short term (as an attractive investment Thailand will inevitably have to adjust in order to upgrade its
destination for production and export to mainly Asian countries). manufacturing standards. Moreover, the relevant Thai authorities are
However, Thailand’s long-term competitiveness is deteriorating, required to consider weighing the CPTPP if the US decides to rejoin
especially in the Western world because there is not any tool to help this trade bloc in the future.
market its products there. Moreover, there are signs showing that the
US may rejoin the CPTPP. If so, this will likely help bolster Vietnam’s
competitiveness against Thailand even more.

58 FOOD FOCUS THAILAND FEB 2021

21/1/2564 BE 15:06
56-58_Surf the AEC.indd 58 21/1/2564 BE 15:06
56-58_Surf the AEC.indd 58