The last few years have proven to be a challenging period for proponents of multilateral trade deals. A strong consensus on the benefits of greater trade liberalization has given way to disagreements, resulting in a number of the biggest proposed pacts suffering setbacks.
Undoubtedly, the blow dealt to the 12-nation Trans-Pacific Partnership (TPP) earlier this year following the withdrawal of the US attracted the most attention, but the Regional Comprehensive Economic Partnership (RCEP) - seen by many as a rival to the TPP - has been experiencing problems of its own, albeit in a less headline-grabbing fashion.
Political support for the RCEP remains robust, but it has become clear that numerous challenges still need to be overcome before any final agreement can be reached, and the prospective benefits of the large-scale trade pact felt across the region.
The basics of the deal
The RCEP aims to liberalize trade between the ten members of the Association of Southeast Asian Nations (ASEAN) - Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam - and six countries with which ASEAN has existing free trade agreements (FTAs), namely Australia, China, India, Japan, South Korea and New Zealand.
It is intended to facilitate trade in goods and services, as well as creating greater cooperation on issues such as investment, intellectual property, competition and dispute settlement. Other specific goals include bolstering market access, enhancing transparency and assisting the development of the least economically-advanced members of the bloc.
The RCEP's member states account for a population of 3.4 billion people and a total GDP of around $49.5 trillion (€41.54 trillion), or just over one-third of the global total. As such, it would represent one of the largest FTAs in history.
What obstacles have arisen?
The 16 members of the RCEP bloc remain positive about the potential benefits that a unified approach to trade across Asia-Pacific would offer, but the inherent complexity of organizing a multilateral deal involving numerous countries of varying levels of prosperity has so far stymied efforts to bring negotiations to a swift conclusion.
For example, difficulties have emerged in finding mutually satisfactory solutions for countries that do not currently have any FTAs in place - as is the case with India and China, or Japan and South Korea - while in other cases, tensions over disputed borders and territories have proven an obstruction.
Finding an approach that pleases all 16 countries has also proven complex, as some nations would prefer a simpler manufacturing-oriented strategy, while others are looking for something more all-encompassing that benefits the service sectors and facilitates freedom of movement.
Most notably, a standoff has emerged between India and China, as the former is concerned that an influx of competition from the latter will have a negative impact on the Indian economy, and is therefore unwilling to offer the level of tariff reductions that China and the ASEAN nations are after. Given that China and India alone account for more than half of the total GDP of the 16 RCEP nations, finding a compromise that satisfies both these key players is essential.
Expectations for the future
At the current juncture, it remains difficult to determine exactly when these challenges might be untangled and a final RCEP deal struck. Negotiations have been ongoing since late 2012, with initial expectations that a final agreement could be reached by the end of 2015 having now proven overly optimistic.
In total, there have been 19 rounds of negotiation, with the most recent talks taking place in Hyderabad, India, and a 20th round of discussions set to go ahead in South Korea this October, during which RCEP members will be hoping to see further progress.
Nevertheless, optimism remains that a deal can eventually be done, with Iman Pambagyo, the chair of the 19th RCEP trade negotiations committee, commenting that the recent talks have been constructive, with key agreements reached on economic and technical cooperation and small business interests.
He said: "I keep on saying that we can fix the finishing line. I remain positive. These negotiations could be concluded sometime in 2018, provided the countries accept some more flexibility to help address issues."
