The RCEP summit would be held in conjunction with Malaysia’s ASEAN chairmanship this year.

As an ASEAN-led initiative, the RCEP could emerge as a formidable economic force with the involvement of 15 countries, including all 10 ASEAN members and five key partners, namely China, Japan, South Korea, Australia and New Zealand.

This is more so as it represents a staggering consumer base of 2.3 billion people or nearly one-third of the global population, he said to Bernama.

With free trade at its core, the RCEP summit would serve as an appropriate medium for ASEAN to promote favourable economic agendas that generate viable financial vibrancy for Southeast Asia and beyond the region.

The RCEP summit is also a timely opportunity to reinforce the region’s economic role amid growing global protectionism, he said, citing the United States (US) government’s imposition of debilitating tariffs on its trading partners as a prime example of a government intervention disrupting free trade.

Concurring, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the hostile trade stance of the Trump administration could motivate other nations to work together and become the next economic powerhouse, ensuring a fairer system that benefits both developed and developing economies.

As such, preparing the groundwork and finalising the agenda for the RCEP October summit is pivotal.

To this end, RCEP trade and economic ministers would meet on Sept 25 to prepare the agenda, chaired by Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Aziz.

“The summit offers leverage for Malaysia to promote a laissez-faire economic structure, which is economically beneficial as demand and production are driven by market forces.

“This structure could spur exponential economic growth due to minimal interventions by authorities,” Mohd Harridon said.

Last month, Prime Minister Datuk Seri Anwar Ibrahim announced Malaysia’s plan to chair the RCEP summit, aiming to show that Asia, as a continent of major economies, can still champion openness even as others turn inward in the global economic arena.

Mohd Harridon said a more market-driven philosophy across ASEAN would encourage countries to collectively work towards common economic goals, thereby creating an ecosystem of growth that is more resilient and harmonised.

While the RCEP agreement came into effect for Malaysia in March 2022, this will be the first time that the country is hosting a leaders' summit for the bloc.

Coordinated gains from RCEP

On the benefits of a more coordinated RCEP platform, Mohd Harridon said the RCEP provides a valuable avenue for member countries to raise issues related to economic prudence and financial challenges.

“With frequent discourses and cooperation, ASEAN member countries could better assess economic risks within a five to 10-year horizon. This would allow the region to be fully prepared for financial headwinds,” he said.

He added that the RCEP could also serve as a platform for consensus in trade, investment and supply chain coordination, ensuring smoother inflows and outflows of capital while enabling trade and commerce to flourish across ASEAN.

At the same time, Malaysia can integrate its economic policies into ASEAN’s broader framework.

By leveraging its diplomatic channels, Malaysia could position itself as a key hub for regional trade and commerce, highlighting its ability to produce positive financial outcomes for the wider region, Mohd Harridon said.

Addressing RCEP challenges

At the same time, he acknowledged challenges in ensuring the RCEP delivers tangible benefits to all member states.

“There are instances of protectionism within ASEAN, where countries aspire to safeguard their own economic vibrancy. Openness and free trade are sometimes viewed as encumbrances to national growth,” he said.

Nevertheless, Mohd Harridon emphasised that the RCEP is the right platform to negotiate such differences.

“The primary gist is financial sustainability, and laissez-faire is an amicable approach to sustain a nation over the long term. Strategic negotiations are key to achieving consensus for greater openness and free trade,” he said.

Meanwhile, Mohd Afzanizam said Malaysia has demonstrated its leadership in steering ASEAN towards prosperity, citing its role in peace processes and its openness to trade and investment.

He noted that while the RCEP presents opportunities, its success will hinge on addressing disparities among members, given the mix of developed and developing economies within the bloc.

“The challenge lies in ensuring a more balanced and inclusive approach so that each member benefits from multilateral trade agreements. This may involve capacity building, technology transfers and economic liberalisation,” he said.

Mohd Afzanizam added that compromises will be necessary as RCEP-related reforms could impact domestic legislation and political landscapes.

“Developing countries tend to be protective as they need to ensure their local players can scale up.

“Meanwhile, developed countries are seeking new markets. Achieving the right balance requires a total buy-in from all member states,” he explained.

As Malaysia prepares to host the first RCEP Summit alongside the ASEAN Summit in October, economists agree that the platform is not only crucial for strengthening ASEAN’s economic agenda, but also for navigating the delicate balance between openness, protectionism and shared prosperity.

-- BERNAMA