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| Map of the new Regional Comprehensive Economic Partnership |
The
Regional Comprehensive Economic Partnership
China
is set to commence negotiations to create a 16-nation trade bloc,
known as the Regional Comprehensive Economic Partnership (RCEP),
which has recently been announced at the ASEAN summit in Phnom Penh
that concluded in late November 2012. The RCEP will include the 10
members of the Association of Southeast Asian Nations (ASEAN) plus
China, India, Japan, South Korea, Australia and New Zealand, and will
have the effect of lowering trade barriers and custom duties across
the region by the end of 2015. ASEAN includes Brunei, Cambodia,
Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand
and Vietnam.
In
the Asia-Pacific region, economic alliance negotiations have mostly
so far been conducted bilaterally.The six ASEAN partner countries,
including China, Japan, Australia, India, South Korea and New
Zealand, already have respective Free Trade Agreements (FTA) with the
ASEAN nations. But the envisioned extensive FTA would be created by
expanding the existing frameworks. The countries will beging to hold
first-round talks with the aim of concluding the negotiations at the
end of 2015. Nevertheless, this is not to say that the new FTA will
be easily achieved, there are many challenging tasks to be
accomplished before it can produce effective results.
China
will become No. 1
The
OECD believes that within 50 years China and India will have become
the major economic powers of the world. The organisation that brings
together the 32 most industrialised countries of the world maintains
that these two countries will account for almost half of the world's
wealth in 2060.
In a report entitled A Look at 2060: An overview of long-term growth, the OECD concluded that the global economy will grow at a rate of 3pc over the next 50 years. The OECD estimates that the current economic crisis will fade and the world economy will grow with consistency, but with a different pattern to the current. The Report identifies that emerging countries will behave with more vigor and growth, but gradually their evolution will slow and will go on to match the average of the current OECD countries.
In a report entitled A Look at 2060: An overview of long-term growth, the OECD concluded that the global economy will grow at a rate of 3pc over the next 50 years. The OECD estimates that the current economic crisis will fade and the world economy will grow with consistency, but with a different pattern to the current. The Report identifies that emerging countries will behave with more vigor and growth, but gradually their evolution will slow and will go on to match the average of the current OECD countries.
This uneven pace of
economic growth will lead to a radical change in the world balance.
The combined GDP of China and India will soon overtake the European
economies and exceed that of all current members of the OECD in 2060.
In 2060, China will have economic growth of 4pc and will increase its
specific share of the global economy from 17pc to 28pc of the total.
The euro area which now accounts for 17pc of the global economy, according to OECD projections in 50 years will only account for 9pc of the total. Furthermore, the US whose economy currently represents 23pc of the world economy will reduce its weight to 17pc in 2060.
Australia's place in the Asia-Pacific Region
The euro area which now accounts for 17pc of the global economy, according to OECD projections in 50 years will only account for 9pc of the total. Furthermore, the US whose economy currently represents 23pc of the world economy will reduce its weight to 17pc in 2060.
Australia's place in the Asia-Pacific Region
At
the end of October 2012, Australia published a policy white paper
that looks at its role of being a European country in the
Asia-Pacific region.
Australia
has European cultural origins and other alignments which sometimes
hamper its image in the Asia Pacific Region. But nevertheless it
relies increasingly on Asian immigration, especially from China and
India, to ensure its economy competitiveness and to meet the annual
residence quota within its population policy.
It
has considerable security interests in its territory and maritime
zones, but it only has a small population of 23 million. It is a US
ally but it also has close economic and increasingly societal ties
with China who has become its top trading partner in recent years.
Interestingly,
Qantas, its national airline, has just re-positioned itself as a new
regional hub-and-spoke network airline to service the Asia-Pacific
region. It has abandoned its flights to Europe choosing instead to
enter into a partnership agreement with Emirates flying its customers
to the Dubai hub where they will be able to connect to other
destinations outside the Asia-Pacific Region.
The
Geo-Trade Blog will continue to follow closely how Australia
continues to engage with the Asia-Pacific region and how it develops
its strategic policy alignments with China and the US, particularly
whether they will be governed by cultural affiliation with the US or
by economic interests in the Asia Pacific Region.
