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International relations

Southeast Asian ministers seek RCEP trade pact by year-end

ASEAN pushes ahead with greater customs and banking integration

Vendors await customers at a Hanoi market. Members of the Association of Southeast Asian Nations are ramping up efforts to finalize a regional trade pact.   © Reuters

CHIANG RAI, Thailand -- Finance ministers and central bankers from the Association of Southeast Asian Nations will push to finalize an Asian trade megadeal by the end of this year, according to a draft declaration for their Friday meeting here obtained by Nikkei.

ASEAN leaders had hoped to reach agreement on the Regional Comprehensive Economic Partnership -- a 16-country trade pact that also includes Japan, China and India -- sometime last year. But India's resistance to scrapping tariffs and other roadblocks stood in the way, and they gave up on this goal at a November summit in Singapore.

Efforts on RCEP are ramping up again, including a ministerial dialogue on the deal. ASEAN finance and banking chiefs are expected to take a strong stand toward a swift agreement at their upcoming meeting. Australia, New Zealand and South Korea round out the countries taking part in the RCEP negotiations.

The Thai and Philippine central banks are also set to sign a memorandum of understanding toward promoting the use of local currencies to settle bilateral trade and investment. The Indonesian, Malaysian and Thai authorities signed a similar memorandum in 2016 to reduce currency risks in trade.

The draft declaration welcomes the new agreement, and pushes for a framework for using local ASEAN currencies by the end of this year.

The Southeast Asian bloc is working to simplify customs procedures as well. The ministers will likely suggest adding more countries, such as Laos, to the ASEAN Single Window -- a unified electronic system for customs clearance which now includes five of the bloc's members.

In terms of financial integration, the bloc plans this year to designate at least two banks as "qualified ASEAN banks," which are given greater access to markets outside their home countries.

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