Doubts over India joining RCEP
|by Dinesh Malhotra||Bharat Times|
BANGKOK, November 5: Living in the worrisome global trade environment created by the U.S.-China trade war, Southeast Asian leaders, , pushed for a deal on what could be the world’s largest trade bloc on Sunday as officials worked behind the scenes to try to salvage progress following new demands from India.
Hopes of finalising the Asia-wide Regional Comprehensive Economic Partnership (RCEP), which is backed by China, were thrown into doubt at the summit of the Association of Southeast Asian Nations (ASEAN) in Bangkok, Thailand.
Indian Prime Minister Narendra Modi did not even mention the RCEP deal in opening remarks at a meeting with Southeast Asian leaders and instead spoke only of reviewing the existing trade agreement between ASEAN and India.
“This will help not only further strengthen our economic relations, but our trade will also be more balanced,” Modi said.
RCEP (Regional Comprehensive Economic Partnership) Deal:
In 2012, ASEAN leaders and six partner countries launched the RCEP trade negotiations during the 21st ASEAN Summit in Phnom Penh. Seven years later, there will be an announcement by Thailand which may provide the world with the biggest ever trading block. On the sidelines of 35th ASEAN Summit in Bangkok Thailand, 10 members of Association of Southeast Asian Nations or ASEAN and the bloc’s six trade partners are negotiating to forge world’s biggest trade pact – RCEP or the Regional Comprehensive Economic Partnership. The development came hours after last minute demands raised by India led to late-night discussions alongside the ASEAN summit, which is being hosted by Bangkok.
India is rightly worried about a potential flood of Chinese imports. It is understood Delhi placed new demands last week, which according to an insider, “are difficult to meet.”
Prime Minister Narendra Modi said addressing India’s concerns over “unsustainable trade deficits” remained important.
“We have put forward reasonable proposals in a clear manner and are engaged in negotiations with sincerity. We would like to see commensurate levels of ambition on services from many of our partners,” PM Modi said in an interview to Bangkok Post newspaper.
Some countries have raised the possibility of moving ahead without India on forming a bloc that also included Japan, South Korea, Australia and New Zealand.
But Thai commerce minister Jurin Laksanawisit told Reuters on Sunday that India had not pulled out and all was good on RCEP negotiations.
Southeast Asian countries are hoping to manage at least a provisional agreement this time.
“We should continue to work to conclude negotiations on the RCEP within this year to stimulate economic growth, as well as trade and investment,” Thai Prime Minister Prayuth Chan-ocha told the formal opening of the ASEAN summit on Sunday.
“We welcome the conclusion of the RCEP negotiation and (are) committed to sign the RCEP agreement in 2020”, he added.
He highlighted the risks of “trade frictions” and “geo strategic competition” in a region where the trade tensions between the United
States and China have helped drive growth to its slowest in five years in 2019.
Instead of President Donald Trump or Vice President Mike Pence, the United States is represented by Commerce Secretary Wilbur Ross and White House national security adviser Robert O’Brien at the summits. The U.S. sending a lower level delegation to the summits this year has raised concerns for some regional leaders that it can no longer be relied upon as a counterweight to China’s increasing regional might. Thus accentuates the importance India assumes being part of the group. If India is in, it would be less dominated by China.
The ten member states of the ASEAN group are ― Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. And ASEAN’s free trade agreement partners Australia, China, India, Japan, Korea and New Zealand.
Prime Minister Narendra Modi sought to dispel the notion that India is as reluctant to join the RCEP trade deal. In a detailed interview to Bangkok Post he said, India remains committed to a comprehensive and balanced outcome from the ongoing RCEP negotiations but India would like a win-win outcome.
Prime Minister expressed that a mutually beneficial RCEP, in which all sides gain reasonably, is in interests of India and of all partners in the negotiation.
RCEP negotiations which began in Cambodia in 2012 covers areas, including trade in goods and services, investment, market access, economic cooperation, intellectual property and e-commerce.
PM Modi also met PM Shinzō Abe of Japan, PM Nguyen Xuan Phuc of Vietnam and Australian PM Scott Morrison in Bangkok, before returning to Delhi on November 4.
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