Jakarta. ASEAN is open to having the world’s largest trade deal, RCEP, gain new members as Southeast Asian countries seek shock absorbers after the US’ tariffs caused economic uncertainties to spike. 

The RCEP, short for the Regional Comprehensive Economic Partnership, covers nearly a third of the global economy. The trade deal, which eliminates virtually all tariffs among its members, comprises fifteen countries. Aside from the ten ASEAN members, including Indonesia, major economies such as China, Australia, Japan, South Korea, and New Zealand are also part of this trading bloc. ASEAN’s secretary-general Kao Kim Hourn confirmed Friday that the RCEP had piqued the interests of other economies, namely Bangladesh, Sri Lanka, Chile, and Hong Kong.  

“ASEAN member states welcome countries that are interested in acceding to the RCEP,” Kao told a briefing in Jakarta.

The diplomat revealed that ASEAN was open to “linking the RCEP with other free trade areas”, although he did not specify which. ASEAN is now mulling arranging a summit focusing on the RCEP. Southeast Asian chief diplomats and finance ministers also plan on having a joint meeting this October to deepen economic integration.

“We have to focus on the ASEAN mechanisms, and how to leverage them, ... including the RCEP, to make sure it becomes a shock absorber. Something that will help ASEAN go through the current period,” Kao said.

The RCEP has emerged as a possible solution amidst US President Donald Trump’s tariff salvo. 

ASEAN countries are about to face US tariffs that can go up to 40 percent for Myanmar and Laos, unless they make trade deals by August 1. Both Cambodia and Thailand were assigned 36 percent. Malaysia and Brunei Darussalam received import tax rates of 25 percent in Trump’s latest letters. Trump also raised the tariffs on Philippine goods to 20 percent, although he still left the door open for negotiations. Vietnam was the first to have its US tariffs dropped from 46 percent to 20 percent after a series of talks. To date, Singapore is the only ASEAN country not facing import duty hikes from the US, and will remain subject to the baseline 10 percent. Indonesia has just struck a deal with the US. The agreement sets the US' tariffs on Indonesia at 19 percent, way below the originally planned 32 percent.

Senior economist Lili Yan-Ing said not long ago that the RCEP unfortunately remains underutilized to this day despite the huge potential that the pact holds to soften the blow of Trump’s tariff policies. “Indonesia and ASEAN members need to simplify the RCEP, so Southeast Asian companies can take a better advantage of the trade agreement,” she told the Jakarta Globe.

Analyst Bhima Yudhistira, too, had pushed for Indonesia to trade more with fellow ASEAN economies after calling Trump’s latest deal with Jakarta far from a win-win. Under the deal, Indonesia has made some major compromises, including letting American goods in its market tariff-free. Jakarta also agreed to make some multibillion-dollar imports of US energy and farm products. Plans are underway to acquire 50 Boeing jets.

“We need to push for intra-ASEAN trade. Let’s not rely too much on our export to the US because the final tariff negotiation outcome puts Jakarta at a disadvantage,” Bhima said.