Wang Xiaofeng, Beijing/ Rupa Debroy, Delhi
China is seeking to push for early conclusion of the Regional Comprehensive Economic Partnership (RCEP) agreement , preferably by end of 2020, with or without India.”China is fed up with India dragging its feet since 2012 when negotiations for concluding the RCEP . Now that it is fairly clear that Indian economy is on a nosedive while Chinese economy is already on way to recovery, Chinese leaders are against wasting time to get India in,” said a top Chinese trade official to Easternlink , but he was not willing to be named .” If India agrees to sign up, China will be very happy , but India drags its feet and holds up the signing of the RCEP, it will badly impact the economies of the all RCEP nations. We cannot afford to suffer because of India’s dilly-dally attitude,” the official said , but insisted that while he was aware of the Chinese leadership thinking on the issue, he was not formally authorised to speak to the media. The Regional Comprehensive Economic Partnership (RCEP) is a proposed free trade agreement in the Indo-Pacific region between the ten member states of the Association of Southeast Asian Nations (ASEAN), namely Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam, and five of ASEAN’s FTA partners—Australia, China, Japan, New Zealand, and South Korea. India, which is also ASEAN’s FTA partner, opted out of RCEP in November 2019.
Li Wei, senior research fellow of the National Academy of Development and Strategy at Renmin University of China, who is also working closely on the RCEP negotiations, told the Easternlink that the COVID-19 pandemic had ravaged many export-reliant ASEAN economis and that might accelerate the pace of the signing process because greater trade was seen as the only way out to rejuvenate these economies.
“The first half of this year has been a huge economic disaster for ASEAN exporters. They are keen for the RCEP to be signed and made effective once the pandemic is over to facilitate quick economic recovery through the creation of a big regional free trade zone,” Li said.
Li also noted that as China recovers from the pandemic, the massive demand in its economy is also reviving and creating opportunities for exporters in the RCEP member countries.
China and Japan for different reasons were keen for India to join the RCEP — China to use the agreement to fully access the huge Indian market and Japan to use India to balance China.
“India’s concerns originates from its fragile economic structure, which is heavily reliant on agriculture and inadequate in terms of industry and infrastructure,” Zhou Rong, a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China, told the Global Times.
“Given the circumstances, the country is worried that the regional trade pact will lead to a surge in imports and hurt domestic industries such as manufacturing and dairy farming,” Zhou told Easternlink , adding that ” such concerns as the ones for protecting domestic industries will grow in post-Covid India.”
After the RCEP Trade Negotiation Committee met from April 20 to 24, a package was sent to India indicating accommodations of some of the country’s concerns. However, despite media reports that claim India is contemplating rejoining the trade pact, experts said it is highly unlikely that an agreement can be reached and signed by year-end.
“India’s main concerns are on exports and imports, and it will be very demanding in that aspect,” Li said. “It is unlikely that we can reach an agreement between India and everyone else in the free trade pact before this year ends.”
In 2018 to 2019, India registered trade deficit with 11 RCEP member countries out of the total 16.
Indian Prime Minister Narendra Modi said that allowing a free trade zone in the region might work against “Indian economic interests.”
But many Indian economists say dropping out of the RCEP totally will be a disaster in the long term for India.
India’s crony capitalists , thriving on the patronage of the government, have failed to make their industries competitive and so they fear loosing to other nations in a free trade environment.Attachments area