SEOUL • Left outside the US- backed Trans-Pacific Partnership (TPP) trade pact struck last week, China and India approach this week's talks for a huge Asiawide equivalent with fresh urgency, lest competitor nations steal a march on export access.
Beijing is a key driver of the Regional Comprehensive Economic Partnership (RCEP), a proposed 16-nation free trade area that would be the world's biggest such bloc, encompassing 3.4 billion people.
"Member countries will be under pressure to fast-track negotiations for RCEP," said a senior official in India, which is keen to avoid being excluded from major trade accords.
The RCEP was first conceived by the 10 Asean members, but China is increasingly prominent as a backer of the proposed pact... Seven countries - Australia, Japan, Malaysia, New Zealand, Singapore, Vietnam and Brunei - are in both the TPP and RCEP.
While China's rivalries with India and Japan will complicate progress, it has incentive to get things moving.
China's central bank estimates that the world's second-largest economy could forfeit a 2.2 per cent boost to gross domestic product if Beijing does not join the TPP, according to a commentary by the bank's chief economist, Mr Ma Jun, published in the official Shanghai Securities News last Friday.
China stands to lose ground to manufacturing competitors such as Vietnam which, as a TPP member, will have greater duty-free access to the United States and other member nations, said Professor Tu Xinquan of the University of International Business and Economics in Beijing.
"It is not that there is a competition between the RCEP and the TPP but, overall, because of the pressure put on by the TPP, there is hope for a faster end to negotiations for more liberalised trade in the region," Prof Tu said.
The RCEP was first conceived by the 10 Asean members, but China is increasingly prominent as a backer of the proposed pact.
While the RCEP has largely been seen as an alternative to US-led trade plans, some say that view is evolving.
China may ultimately look to steer RCEP talks towards a broader pact that would encompass TPP into a Free Trade Area of the Asia-Pacific, said Mr Kim Young Gui, head of regional trade studies at the Korea Institute for International Economic Policy in Seoul, referring to an idea first put forward by the Asia-Pacific Economic Cooperation (Apec) grouping.
Seven countries - Australia, Japan, Malaysia, New Zealand, Singapore, Vietnam and Brunei - are in both the TPP and RCEP.
The TPP deal, reached on Oct 5 after marathon talks between the US and 11 Pacific Rim nations, aims to liberalise commerce in 40 per cent of the world's economy, and would be a legacy-defining victory for President Barack Obama.
Mr Obama wants the TPP to help boost US influence in East Asia and counter the rise of China, but Beijing officially welcomed the pact, saying it hoped the deal would promote Asia-Pacific trade.
Prime Minister Shinzo Abe of Japan, a key player in the TPP, held out the prospect of bringing China into the deal in future, saying it would increase the pact's strategic significance and improve regional stability.
A Japanese Foreign Ministry official said the TPP would accelerate the pace of the RCEP and could have some impact on"raising the level of the outcome of the negotiations", but the "very diverse group" had different ideas on what might be desirable.
The 16 RCEP countries will present their offers for market opening when they meet in Busan, South Korea, today, with an aim to make "best efforts" towards reaching agreement by year-end, a South Korean official close to the negotiations said.
Negotiators are expected to share their lists of offers for tariff reductions on goods and service sectors.
But Mr Song Yeong Kwan, a research fellow at the state-run Korea Development Institute, believes that an agreement remains years away.
"Some countries have tensions with China, so it will not be easy, and the process could be a bumpy ride," Mr Song said.