New Asian trade deal to be signed in ’20, Thailand says

Asian countries held conclusive talks on what could be the world’s biggest trade pact and there will be an announcement of success at a summit in Bangkok, despite doubts raised by India, the Thailand hosts said on Monday.

But questions still hung over India’s participation in the China-backed 16-nation Regional Comprehensive Economic Partnership (RCEP), which has been given new impetus by the US-China trade war.

Despite a message of support from US President Donald Trump to the Association of Southeast Asian Nations (ASEAN), regional countries noted that Washington had downgraded its delegation for the annual Asian meetings.

Southeast Asian countries hoped to announce at least provisional agreement on the 16-nation trade bloc that would account for a third of global gross domestic product (GDP) and nearly half the world’s population.

But last-minute demands raised by India meant negotiations among ministers went late into the night. The bloc includes the 10 ASEAN members plus China, South Korea, Japan, India, Australia and New Zealand.

“The negotiation last night was conclusive,” Commerce Minister Jurin Laksanawisit told Reuters.

“There will be an announcement together on the success of the RCEP agreement by the leaders later today. India is part of this as well and will jointly make the announcement. The signing will be next year.”

But an Indian official with close knowledge of talks said not everything had been resolved and discussions were still on, adding that it was “all being decided politically”.

China’s foreign ministry referred in a statement to “RCEP-15 member states” concluding most negotiations - implying that only 15 countries had agreed. Australia’s trade minister Simon Birmingham also cast doubt on whether India was on board.

Meanwhile a Chinese official on Monday said breakthroughs have been made in negotiations for an Asia-wide trade pact that would be the world’s biggest trade deal, though he said consultations with India are still going on.

An announcement on the deal would be made later in the day by leaders attending the Association of Southeast Asian Nations (ASEAN) summit in Bangkok, said Chinese Vice Foreign Minister Le Yucheng. Host country Thailand had said earlier that the deal would be ready to sign in 2020.

Le said there were a “few outstanding issues that will be completed by this year” and added that “whenever India is ready they are welcomed to come on board”.

The envisioned bloc includes the 10 ASEAN members plus China, South Korea, Japan, India, Australia and New Zealand.  Thailand said on Sunday that Southeast Asian nations are committed to signing a pact by February 2020 on forging what could become the world’s largest trade bloc, even after new demands by India dealt a blow to the process backed by China.

Going into this weekend’s summit of the Association of Southeast Asian Nations (ASEAN) in Bangkok there had been hopes of finalising negotiations this year on the 16-nation Regional Comprehensive Economic Partnership (RCEP).

But the ASEAN chairman’s final statement released on Sunday night said the 10-nation grouping welcomed a “commitment to sign the RCEP Agreement in 2020”.

“This will significantly contribute to an open, inclusive and rules-based international trading system and expansion of value chains.”

New impetus to complete the deal has come from the trade war, which has knocked regional growth, but India fears a potential flood of Chinese imports and officials with knowledge of the negotiations said India had raised late demands.

One advantage for Southeast Asian countries of including relative heavyweight India in the trade pact would be less domination by China.

Diplomatic and security calculations in Southeast Asia have shifted under the Trump administration.

And the US decision to send a lower level delegation to the summits this year has raised regional concerns that it can no longer be relied on as a counterweight to China’s increasing regional might.

Because of the downgrade in the US delegation, only three of the 10 regional leaders joined the usual US-ASEAN meeting.

US Commerce Secretary Wilbur Ross told a business meeting on the sidelines of the summit that the administration of US President Donald Trump was “extremely engaged and fully committed” to the region.

White House national security adviser Robert O’Brien brought a personal message from Trump offering to host a meeting of Southeast Asian leaders in the United States.

He also condemned Chinese “intimidation” in the South China Sea, where several regional states reject China’s sweeping maritime claims and complain that Beijing is illegally stopping them from exploiting their energy resources and fishing grounds.

But diplomats and analysts said the message from Washington was clear.

“Doubts have been raised in a more serious way about the Trump administration engaging and this may also play into the hands of other superpowers in pushing their own agendas,” said Panitan Wattanayagorn, a former Thai national security adviser.

Reuters