Missing from all this cooperation, however, has been a mechanism to integrate the whole of Asia together in a meaningful way. RCEP provides this template. “Substantial conclusion” will not mean that people will be eagerly reviewing the texts and schedules on November 5. There are two reasons for a delay in seeing the contents. First, officials have been frantically switching, dropping and including provisions over the past few weeks in the sprint to the finish line. Most of these elements have been under discussion for years. RCEP officials started working on the deal at the end of 2012. However, in the final push to get an agreement done, sensitive items actually have to get addressed and dealt with one way or another. To ensure consistency across the document, the lawyers will need to carefully review the entire deal from start to finish. The need for a careful legal scrub is not unique to RCEP. Most trade agreements require something similar and ought to be welcomed by all. The worst outcome would be to have a deal riddled with flaws that need correction later.
While Asia has been an exporting powerhouse for decades, it has not been particularly focused on buying and selling goods and services to neighbors. This is changing. One thing that is missing, however, is a structure to manage an evolving economic landscape for Asia. The existing institutional arrangements do not suit a future order very well. There are only two organizations that might play a role: the Association of Southeast Asian Nations (ASEAN) and Asia-Pacific Economic Cooperation (APEC). The former consists of 10 countries in Southeast Asia while the latter includes 21 members, many of whom are not in Asia. However, 16 countries have spent years working on a trade arrangement for Asia: the Regional Comprehensive Economic Partnership (RCEP). The 16 member governments (Australia, Brunei, Cambodia, China, India, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, South Korea, Thailand, and Vietnam) are struggling to complete negotiations on the FTA for November. The stakes for RCEP are greater than most participants imagine. If the world is, indeed, watching a new “Berlin Wall” moment, RCEP is likely to become a critically important part of the new world order. It is the only readily available platform for managing trade and economic issues in Asia.
When passed, the European Union (EU) Goods Package, as the legislation is called, will have ramifications to e-commerce that are at least as significant than the move by some countries to reduce or eliminate de minimis thresholds. Small and Medium Enterprises (SMEs) who sell online into the EU will be the most severely affected. The added administration and compliance requirements could cost businesses as much as €2,500 annually. This amount could equal the annual margins of some smaller firms that sell online today. Firms from Asia are especially at risk.