The Regional Comprehensive Economic Partnership (RCEP) negotiations includethe 10 ASEAN Member States and ASEAN’s six FTA partners – Australia, China, India, Japan, Republic of Korea (ROK) and New Zealand. These countries are important economic partners and neighbours for Australia.RCEPcountries include nine of Australia’s top 12 trading partners,and cover almost 60 per cent of Australia’s two-way trade, valued at $356.4 billion (see Annex 1).
Australia has a broad and diverse range of trade and investment interests in RCEP countries, across all sectors of our economy (agriculture, manufacturing, mining and resources and services). Around 48,000 Australian companies/organisations export to RCEP countries each year1 and it is estimated that around 5,400 Australian companies have some form of representation in RCEP countries.2 Over the past decade, Australia’s trade with RCEP countries has increased significantly, recording annual growth of 10.7 per cent compared with Australia’s overall annual growth in two-way trade of 7.8 per cent.
Trade in Goods
The progressive elimination of barriers to trade in goods is a key aspect of the Guiding Principles and Objectives for Negotiating the RCEP endorsed by Leaders. Currently, RCEP countries currently account for almost three quarters (74.1 per cent) of Australia’s exports and 62.8 per cent of two-way trade in goods. Through RCEP, Australia will look to build on the market access commitments already negotiated through existing free trade agreements. Australia will, through RCEP, press for greater liberalisation in regional markets, particularly in the agricultural sector and enhance opportunities to integrate into regional value chains.
Trade in Services
RCEP will seek to remove restrictions and discriminatory measures related to trade in services. RCEP countries currently account for almost half (46.5 per cent) of Australia’s services exports and 39.4 per cent of two-way trade in services. Through RCEP, Australia will seek to buildon the outcomes of existing bilateral and regional agreements, and work towards greater liberalisation of services sectors throughout the region. Given the importance of the services sector to the Australian economy, and the key role that many services play in enabling trade, particularly trade through integrated supply chains, RCEP has considerable potential to support greater engagement of the Australian services sector in the region.
RCEP will aim to create a more liberal and competitive regional investment environment. At present, RCEP countries account for 13.6 per cent of total foreign investment in Australia, valued at $275 billion in 2011,and 15.3 per cent of total Australian investment abroad, valued at $180 billion in 2011. Given the strength of Australia’s trade relationships in the region, these figures suggest that our investment profile lags behind that of our trade.
Japan, New Zealand and Singapore are ranked in Australia’s top 11 source countries in terms of foreign investment stock (accounting for 10 per cent of the total), and Chinese investment in Australia is expanding significantly, increasing more than three-fold over the past five years (2007-11). New Zealand, Japan, Singapore and China are also ranked in the top 14 destination countries for Australian investment abroad. However, total Australian investment flows with RCEP countries over the past 10 years have on the whole hovered between 10 and 14 per cent for inward investment and 15 per cent for outward investment.
As the graphs below illustrate, Australian investment flows have not grown in line with the increases in Australian trade flows to the region. Australia sees scope to broaden and deepen Australian investment in the region, and regional investment in Australia, to align more closely with the growth in our trade.
The Guiding Principles and Objectives detail additional issues beyond goods, services and investment that RCEP negotiations will address. These include economic and technical cooperation (including on electronic commerce), intellectual property, competition and dispute settlement. Additionally, the negotiations may consider other issues covered by existing FTAs among RCEP countries throughout the course of negotiations. At the 30 August 2012 meeting of Economic Ministers, Australia’s Minister for Trade and Competitiveness Dr Emerson made clear Australia’s intention to pursue the inclusion of labour and environment issues in the negotiations.
|Exports ($bn)||% share||Imports ($bn)||% share||Total ($bn)||% share||Rank|
|Notes: totals may not add due to rounding|
|*Other ASEAN countries: Vietnam, Philippines, Brunei, Cambodia, Laos and Myanmar|
|Source: DFAT STARS database and ABS catalogues 5302.0 (Mar 2012), 5368.0.05.004 & unpublished ABS data.|