Recently, leaders from the Association of South East Asian Nations (Asean) took one of the most significant steps towards strengthening economic cooperation among them by announcing the launch of the negotiations for the conclusion of the Regional Comprehensive Economic Partnership (RCEP). The RCEP is slated to be the most ambitious economic partnership agreement as it would surpass in size and scale the European single market that came into being in 1992. This is because RCEP is expected to eventually comprise six partner countries of Asean in the East Asian region, which include India, China, Japan, Australia, Korea and New Zealand. What makes RCEP such a formidable economic grouping is the fact that in 2011, these countries together accounted for over 28% of world GDP and over 28% of global trade. Three of the top 10 countries in terms of size of GDP belong to this region. Besides, this group of countries includes those whose growth momentum was punctuated only by the global slowdown.
It must be emphasised here that RCEP is not going to be an agglomeration of the economic partnership agreements that Asean has forged with each of its six potential partner countries. In the past, Asean developed a pattern of integration with countries surrounding it that can best be described as the hub-and-spoke model.
Thus, while Asean as a group could be visualised as the hub, the partner countries were the spokes. The web of production networks that the Asean members had built with their partner countries supported this model. However, Asean could not play an effective hub since it had not emerged as a single entity that could negotiate collectively. In other words, Asean was not a customs union having common external tariffs, but was only a conglomeration of countries whose association was established on the basis of common economic aspirations.
Steps towards the transformation of Asean into a meaningful hub were taken as early as 2007, with members agreeing to establish the Asean Economic Community (AEC) as an integrated economic region by 2015. A recent assessment shows that big strides have already been taken towards trade and investment liberalisation within the region.
By end-2011, the average intra-tariff rate for Asean-6 countries (Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and Thailand) under the ATIGA (Asean Trade in Goods Agreement) was down to 0.05%. Thus, with the exception of Vietnam and the three least developed countriesLaos, Cambodia and Myanmarthe Asean members were