Ministerial level Trade Officials from 16 Asia Pacific Countries including Japan, China & India began talks on Friday in Bangkok, as they have been trying to conclude negotiations to create the world’s largest free trade area by the end of this year.
All eyes are on whether some nations like India and Indonesia, which are believed to be wary about drastically opening their markets will make concessions to realise the Regional Comprehensive Economic Partnership, sources close to the matter said. The 16 members are now aiming for their leaders to announce an agreement after their summit on Monday.
They have concluded negotiations in 18 areas out of around 20, but they have yet to agree on key fields such as tariffs, trade in services and investment.
India has been reluctant to lower its trade barriers, as the country has suffered massive and chronic trade deficits with China for many years, the sources said.
If the free trade area, which would cover half of the world’s population is put into practice, trade and investment activities among RCEP nations would intensify on the back of measures like the elimination and reduction of tariffs.
In India, however, there is concern that the free trade deal would result in an influx of cheap agricultural and industrial products such as smartphones from China, further increasing the trade surplus of the world’s second biggest economy, the sources said.
China, meanwhile, has been eager to conclude the RCEP as soon as possible, as the country’s economy has been slowing down against the backdrop of a tit-for-tat tariff trade war with the United States, the sources said.
Beijing also sees RCEP as an important step to achieve Chinese President Xi Jinping’s “Belt & Road Initiative” for the development of infrastructure and trade across Asia, Europe and Africa touted as a modern Silk Road Economic Zone.
The RCEP, covering a third of the global economy, has repeatedly missed deadlines amid the differing ambitions of its members, which include the Association of Southeast Asian Nations. The talks were launched in 2013 and the initial goal was to wrap them up in 2015.
Japan’s New Trade Minister Hiroshi Kajiyama skipped the Ministerial meeting on the Asia wide free trade deal to attend Parliamentary deliberations at home.
Kajiyama has apparently decided to focus on domestic matters after his predecessor abruptly resigned last week over a money and gift scandal. Senior Vice Trade Minister Hideki Makihara took part in the gathering in place of Kajiyama on Friday.
The Ministerial talks started hours later than had been originally scheduled.
RCEP brings together Australia, China, India, Japan, South Korea and New Zealand, as well as the 10 ASEAN Countries; Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.