PHNOM PENH - Two ambitious trade negotiations are moving forward in the Asia Pacific, but Cambodia should first pursue a regional partnership before joining in with all of the Asia Pacific, trade experts say.
Cambodia should build momentum on the existing Regional Comprehensive Economic Partnership, an Asean-driven agreement, before considering the US-supported Trans-Pacific Partnership, experts say.
The RCEP is a deal between Asean nations and the governments of Australian, China, India, South Korea and New Zealand, and groups together about $17 trillion in annual GDP.
The TPP, on the other hand, includes countries from around the Pacific Rim, including the US, Singapore, Brunei, Malaysia, Vietnam, Japan, Peru, Canada, Mexico, Chile, Australia, New Zealand and Taiwan—putting together about $28 trillion in GDP.
Chheang Vannarith, a senior research fellow at the Cambodian Institute for Cooperation and Peace, called the TPP the “gold standard” of trade agreements.
However, he said, “I am afraid that it requires adequate capacity to reform and adapt to such a high standard.”
“There is no rush” for Cambodia to join, he said. “It needs to focus on the regional free trade area.”
Both deals reflect regional economies and political will and would strengthen economic integration, he said. But they also will challenge the World Trade Organization, which is “slow” at facilitating free trade in some goods and services.
The newer, robust deals also deal in goods and services, but they also involve flows of investment, competition policies, and the protection of intellectual property and the environment, Chheang Vannarith said.
Mel Kalyan, a senior adviser to the government’s Supreme National Economic Council, said that several countries in Southeast Asia are looking to join in the TPP.
“So we should also be ambitious and should not put all our fish in one basket,” he said. “We should diversify our trading partners, but at the moment, joining the TPP is beyond Cambodia’s reach, so we should enhance our competitiveness in the RCEP first.”
To do that, Cambodia will need a stronger export capacity and better human resources that can contribute to production, Chheang Vannarith said. That could mean moving from a labor-intensive economy to one that is more knowledge based, he said.