Officials from participating nations who attended a summit on Aug. 30-31 in Singapore hope to reach agreement on the world's biggest trade deal by year end, Reuters reported Sept.1.
Called the Regional Comprehensive Economic Partnership, or RCEP, the trade deal is broader than the Trans-Pacific Partnership trade accord. It comprises the 10 Association of Southeast Asian Nations members and includes Asia's top economies Australia, China, India, Japan, New Zealand and South Korea.
Together, they account for about one-third of global gross domestic product and half the world's population.
The deal does not include the U.S., which is in a trade dispute with China. On Aug. 31, Washington said U.S. President Donald Trump would skip the November gathering of leaders in Singapore. The Trump administration also withdrew from the TPP in 2017.
"We believe that this is the best way to overcome many of the challenges that we are facing in a current global economic environment," Singaporean Trade Minister Chan Chun Sing said in a Nikkei Asian Review Sept. 2 report. "The substantial conclusion of RCEP by the end of 2018 will reaffirm our region's continued support for free trade against the backdrop of rising protectionist sentiments," Chan said in a Sept. 1 Nikkei report.
Participants also hope that progress on RCEP would convince the Trump administration of the importance of multilateral trade. "ASEAN countries and RCEP countries all believe in a multilateral system, a rule-based system," Chan told media at the conclusion of the meeting.
The countries, however, have yet to reach a consensus on the biggest issues, including trade in politically sensitive goods and services such as agricultural products, intellectual property and e-commerce.
Another key hurdle lies in differences in development levels among the 16 countries, with Japan and other advanced economies seeking a high level of trade liberalization while emerging economies want to protect some of their domestic industries, Nikkei said.
The next round of negotiations is scheduled for October in New Zealand.