The Regional Comprehensive Economic Partnership (RCEP) is a proposed free trade agreement (FTA) between the 10 member states of the Association of Southeast Asian Nations (ASEAN) and the six Asia-Pacific states with which ASEAN has existing free trade agreements (namely Australia, China, India, Japan, South Korea and New Zealand).
If all goes as per plan, by the end of 2019, RCEP will be a reality. Keeping the same in perspective, garment makers from ASEAN countries are on a spree to strengthen mutual cooperation to make sure that they are able to make the best of the opportunities that RCEP would have to offer.
Organised by the Garment Manufacturers Association of Cambodia (GMAC), garment manufacturers from the ASEAN nations under the aegis of ASEAN Federation of Textile Industries (AFTEX) met at Phnom Penh recently to discuss challenges facing the industry and promote region-wide cooperation besides touching upon the issues of how to lower the production costs and add value to products.
“One of the important subjects discussed has been the common stance of AFTEX on the Rule of Origin (ROO) for garments for RCEP, which is a mega Free Trade Agreement between ASEAN and China, India, South Korea, Japan, Australia and New Zealand,” maintained Van Sou Ieng, GMAC and AFTEX Cambodia President, adding, “AFTEX is not looking to compete against each other. We are looking to build partnership and collaboration. The good times are not over but have become more challenging. It requires smart Government policies, innovative ideas of the industry players and collaboration locally and to a larger extent regionally to meet these challenges.”
RCEP is said to be the world’s largest economic bloc, covering nearly half of the global economy. What’s more, as per estimates by PwC, the Gross Domestic Product (GDP, PPP) of RCEP member states is likely to amount to nearly US $ 250 trillion by 2050, or a quarter of a quadrillion dollars, with the combined GDPs of China and India making up more than 75 per cent of the amount.
Considering the quantum of business RCEP would offer, especially in textile and readymade garments, its implications simply cannot be overlooked.
“The industry has long and complex supply chain, so collaboration among various actors locally and regionally is very important. Since ASEAN, as an economic community, is looking to create a single production base, AFTEX really has a major role to play to realise this goal,” Sou Ieng explained.
AFTEX is playing an important role in building collaboration among all garment-producing members of ASEAN to help each other grow to create a win-win situation for all.