Deadlock in mega Asia-Pacific trade pact continues

Sandeep Dikshit
Tribune News Service
New Delhi, September 8

Negotiations for a mega trade agreement in the Asia-Pacific region remained stalled after a Trade Ministers-level meeting in Bangkok ended without setting a deadline for its conclusion. 

The Regional Comprehensive Economic Partnership (RCEO) between 16 countries, including India, is one of the two pillars to support Prime Minister Narendra Modi’s Act East Policy and the newly-unveiled Act Far East Policy. The second pillar, security, is more advanced than the economic part.  

A joint statement issued at the end of seventh review meeting of 16 RCEP Ministers, including Piyush Goel, merely “reaffirmed their collective resolve” to bring negotiations to a conclusion. In the past, RCEP review meetings have been more forward-looking by setting deadlines.

The last Ministerial review meeting in Beijing that Goel skipped had hoped to wrap up the agreement by this year end. The statement also hinted at disapproval towards the Indian position. It acknowledged the Indian stance that “certain developments in the global trade environment” may affect “RPC’s individual positions in the course of the negotiations”. But it did not want the participating countries to lose the “long-term vision of deepening and expanding the values chains in the RCEP”. The statement also pointed out that it is precisely the continuing uncertainty in trade and investment environment across the world that has added to the urgency and imperative of concluding the RCEP.

India feels it isn’t being fully accommodated in the services sector while absence of free trade agreements with Australia and New Zealand have made it cautious on opening its dairy and agriculture sectors to the impact of a RCEP free trade agreement. An acknowledgement of the Indian position came from Australian Trade Minister Simon Birmingham who said, “Agriculture is always a sensitive sector and we must be mindful of each other’s sensitivities.” However, he wanted all participating countries to recognise the value in opening up trade flows.

India has hinted at dropping out of RCEP if its strengths and fears are not accommodated. But its trade volumes are significant enough for other 15 RCEP countries to go the extra mile by sending especially deputed senior officials to India for extra discussions with the Commerce Ministry. That is one reason for RCEP putting off the deadline for finalisation of the deadline by one year to the end of 2019.

The tone of today’s statement suggests that this too may not be possible. India has healthy trade flows with three non-ASEAN members discussing RCEP especially with China, Japan and South Korea. Its trade volumes with the other two – Australia and New Zealand – too is not insignificant. The ASEAN countries are collectively India’s largest trading partners and India is the sixth largest trading partner for the 10 member countries.

The ASEAN consists of 10 countries, including Thailand, Indonesia, Malaysia, Brunei, Lao, Cambodia, Vietnam, Myanmar, Singapore and the Philippines. The non-member countries are India, China, South Korea, Japan, New Zealand and Australia.