BANGKOK (REUTERS, AFP) – An agreement on what could become the world’s largest trade bloc is likely to be signed in February 2020, a Thai government spokesman said on Sunday (Nov 3) as negotiators scrambled to salvage progress after new Indian demands.
Hopes of finalising the Regional Comprehensive Economic Partnership (RCEP) have been thrown into doubt at the ongoing summit of the Association of Southeast Asian Nations (Asean) in Thailand. The 16-nation pact - which includes the 10-nation Asean bloc along with China, India, Japan, South Korea, Australia and New Zealand - accounts for 40 per cent of global commerce, 30 per cent of global GDP and half of the world's people.
“We don’t have a conclusion yet. Once there is one it would be announced,” Thai government spokesman Narumon Pinyosinwat told reporters on Sunday.
According to a draft statement by Asean leaders, the signing of the pact will likely be kicked back to 2020.
"Most market access negotiations have been completed and the few outstanding bilateral issues will be resolved by Feb 2020," said a draft agreement obtained by AFP.
Negotiations have sputtered for several years, but the statement said the text of all 20 chapters was now complete "pending the resolution of one" member, believed to be India.
But it said all members were "committed to sign the RCEP" next year in Vietnam, which will take over the Asean chair.
New Delhi is worried its small businesses will be hard hit by any flood of cheap Chinese goods creating "unsustainable trade deficits," Indian Prime Minister Narendra Modi said in an interview published by the Bangkok Post. A person with knowledge of New Delhi’s negotiations said new demands were made last week “which are difficult to meet.” Mr Modi told the Post that he is committed to RCEP talks but added “opening the vast Indian market must be matched by openings in some areas where our businesses can also benefit.”
Beijing sees RCEP as a central pillar of its trade strategy for its Asian neighbourhood, and it is backed by the leaders of Asean and who represent a 650 million-strong market.
Concluding the deal has been made more pressing by the brutal tit-for-tat trade war with the US, which has chipped back at growth in China, the world's second-largest economy.
The tit-for-tat tariffs lobbed by the US and China on billions of dollars worth of goods could drag growth to the lowest rate in over a decade, according to the IMF.
US President Donald Trump said he hopes to sign a deal with China's Xi Jinping in order to roll back some of the tariffs, telling reporters over the weekend an agreement could be signed in the US state of Iowa.
Chinese premier Li Keqiang said earlier in the day his country remained "firmly committed to supporting Asean centrality" as part of its regional ties.