Regional trade deal to give strong boost to ASEAN economies: ADB

A comprehensive economic agreement including China to be discussed at the 22nd ASEAN summit could push Brunei's growth by an impressive 6 percent with significant growth projections for Vietnam, Malaysia and Thailand, according to a report released on Tuesday.

The report by the Asian Development Bank (ADB) estimates that negotiations between ASEAN and six dialogue partners for the Regional Comprehensive Economic Partnership (RCEP) started last year at the East Asia Summit in Cambodia could promote growth significantly by 2025.

Led by the Association of Southeast Asian Nations (ASEAN), the negotiations include all 10 member states and their six free trade agreement partners, namely: Australia, China, India, Japan, South Korea and New Zealand.

"An eventual RCEP trade deal would create the world's largest free trade bloc, with profound economic implications for the world economy," the report added.

In a chart comparing partner countries' projected income gains from the RCEP by 2025, measured by a change from the countries' Gross Domestic Product (GDP) in 2007, Brunei comes out on top with a gain of 6 percent.

Vietnam comes in second with 5 percent while South Korea is predicted to be the third nation that will benefit the most from the partnership, with a gain of almost 4 percent in GDP.

Malaysia is the fourth nation to benefit most from the RCEP with an expected income gains of just above 3 percent and Thailand comes in next with a projected income of slightly below 3 percent.

India, other ASEAN members, Japan, China, Indonesia and Australia are all projected to see a 1 percent gain in their GDP from the trade agreement.

When completed the RCEP will span 16 countries with a combined market of over 3 billion people and a combined GDP of about19.78 trillion U.S. dollars based on 2011 figures.

Negotiations have already kicked off with a formal treaty likely to be signed in 2015.

However, political issues, different scale in economies, aligning labor laws and lack of awareness pose strong challenges for effective implementation of RCEP.

April 23, 2013

Source: Xinhua