THE RECENT US ELECTION has cast doubt over the future of the Trans-Pacific Partnership (TPP) and whether it will be ratified by the US Congress (for a discussion about the TPP in the context of legal services, see China Business Law Journal volume 7 issue 5: Legal Services and FTAs.)
If the TPP is jettisoned by the US, certain countries in the Asia-Pacific region will pin greater hopes on another proposed mega-regional trade agreement, the Regional Comprehensive Economic Partnership (RCEP). The RCEP is currently being negotiated between the 10 member states of the Association of Southeast Asian Nations (ASEAN) and the six states with which ASEAN has existing free trade agreements: Australia, China, India, Japan, South Korea and New Zealand. Both the TPP and the RCEP are considered to have profound geopolitical implications in addition to having significant potential to promote trade liberalisation in Asia. This article considers some key differences between the two proposed agreements, various ways in which the countries in the Asia-Pacific region can maintain the momentum towards freer and fairer trade and what obstacles remain in terms of achieving the objectives of these agreements. The issues are considered with specific reference to financial services and legal services.
TPP AND RCEP: KEY DIFFERENCES
In the area of financial services, the role of regional trade agreements such as the TPP and the RCEP needs to be viewed in the context of calls for greater regional financial integration. Financial integration complements trade integration, a point that has been recognised by many countries within the Asia-Pacific region. The importance of financial integration is reflected in ASEAN’s Financial Integration Framework, the objectives of which include removing restrictions on the provision of financial services by ASEAN financial institutions and increasing the integration of the regional capital markets.
This article is an abridged text of a paper that the author delivered at the 9th ASEAN-Australia-New Zealand Dialogue, which was held in Kuala Lumpur from 30 October to 1 November.
A former partner of Linklaters Shanghai, Andrew Godwin teaches law at Melbourne Law School in Australia, where he is an associate director of its Asian Law Centre. Andrew’s new book is a compilation of China Business Law Journal’s popular Lexicon series, entitled China Lexicon: Defining and translating legal terms. The book is published by Vantage Asia and available at www.vantageasia.com.