By Kalinga Seneviratne
SINGAPORE (IDN) – Ever since the U.S. was invited to join the East Asia summit that is held in conjunction with the annual ASEAN (Association of Southeast Asian Nations) Summit, media and conference attention has been focused on what the President of the U.S. says.
But this year, President Trump boycotting the Summit and sending a low-level delegation led by its newly appointed national security adviser Robert O’Brien has helped to focus attention on the role of the two Asian giants – India and China – in developing a regional trade and security architecture.
“The U.S. decision to send a lower level delegation to the summit this year has raised regional concerns that it can no longer be relied on as a counterweight to China’s increasing regional might,” noted Singapore’s Channel News Asia.
It also noted that because of the downgrading of the U.S. delegation, only 3 of the ASEAN leaders attended the U.S.-ASEAN meeting held alongside the ASEAN summit in Bangkok. The leaders were Thailand’s Prime Minister as the Summit host, Vietnam Prime Minister as the host of the next summit, and Laos Prime Minister as the coordinator of the U.S.-ASEAN dialogue.
The ASEAN Summit that concluded on November 4, thus focused on the Regional Comprehensive Economic Partnership (RCEP) that was initially started by China as a counterweight to the Transpacific Partnership (TPP) that U.S. initiated under the Obama Presidency (and Trump scuttled it) without China’s participation.
RCEP does not include the U.S. and it is negotiated between the 10 ASEAN members (Thailand, Singapore, Indonesia Brunei, Cambodia, Laos, Philippines, Malaysia, Vietnam and Myanmar), China, India, South Korea, Japan, Australia and New Zealand. The bloc account for a third of global gross domestic product and nearly half the world’s population.
The Asian leaders were expected to sign the RCEP agreement at the end of the Summit on November 4, but they issued a statement instead saying: “We noted 15 RCEP Participating Countries have concluded text-based negotiations for all 20 chapters, and essentially all their market access issues; and tasked legal scrubbing by them to commence for signing in 2020”.
The statement also acknowledged that India has significant outstanding issues, which remain unresolved. “All RCEP Participating Countries will work together to resolve these outstanding issues in a mutually satisfactory way. India’s final decision will depend on satisfactory resolution of these issues,” added the statement.
India has been worried about a potential flood of Chinese imports and had raised last minute demands, according to officials involved with the closed-door negotiations in Bangkok. Indian Prime Minister Narendra Modi did not even mention RCEP in his public comments at the ASEAN meet in Bangkok on November 3.
However, in an interview with Bangkok Post’s Kornchanok Rakasaeri, Modi said, that as the 21st century is talked about as Asia’s century, “India is prepared to contribute to this transformation in Asia and the world”. He added that India is building upon its strong civilizational links to the region to build a “robust, modern and multifaceted strategic partnership”.
He pointed out that India’s engagement in the region is pivoted on the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC). “It constitutes a unique link between South Asia and Southeast Asia with five members from South Asia (Bangladesh, Bhutan, India, Nepal and Sri Lanka) and two from Southeast Asia (Myanmar and Thailand),” he noted. “We have announced a number of initiatives to be undertaken by India to advance BIMSTEC cooperation and capacity in diverse areas”.
When pressed about India’s placing of obstacles to the conclusion of the RCEP agreement, Modi acknowledged that a successful conclusion of it will be in the best interest of everyone and he understood the high ambitions of the partners. “We too would like a win-win outcome,” he said.
“We believe that for this, addressing our concerns over unsustainable trade deficits is important. It needs to be recognized that opening the vast Indian market must be matched by openings in some areas where our businesses can also benefit,” he added.
While India would like to play a bigger role in shaping the developing regional architecture in trade and security, yet, influential groups closely aligned with Prime Minister Modi’s BJP party have mounted a big protect campaign in India against the RCEP.
Swadeshi Jagran Manch (SJM), often described as the economic wing of the Rashtriya Swayamsevak Sangh(RSS), began a 11-day nationwide protest on October 10 that drew thousands of people, claiming the deal in its current form will intensify the ongoing crisis in Indian manufacturing and agriculture.
“India’s existing FTAs (Free Trade Agreements) with RCEP members have increased India’s trade with the region. However, Indian industry has held the view that these FTAs have largely increased imports into India rather than increasing Indian exports to regional markets,” noted Economics Professor Geethanjali Nataraj of the Indian Institute of Public Administration, writing in ‘Live Mint’ recently.
She pointed out that “an alarming level of deficit has now cast a shadow on the flourishing trade between the two fastest growing economies of the world and the engines of growth in Asia”. Bilateral trade between China and India touched $87 billion in 2018-19, with the trade deficit widening to $53 billion in China’s favour. Imports from China were 13.6% of India’s total merchandise imports in 2018-19. These imports mainly comprise consumer goods and electronics, such as phones and ICs.
“Though bilateral trade is expected to touch $100 billion next year, it is largely overshadowed by the rising deficit concerns on the Indian side,” she argues. “Indian industry is worried that the further influx of goods from China will hurt local companies, especially those in consumer durables and manufacturing”.
Chinese officials including Premier Li Keqiang have been upbeat on concluding the RCEP deal on the weekend in Bangkok. In public comments, he has been emphasizing China’s acknowledgement of ASEAN centrality on RCEP deal.
Meanwhile the Malaysian Prime Minister Dr Mahathir Mohamed, has warned according to reports from Bangkok that he was in no doubt that the U.S. was now targeting the ASEAN countries “with hostile trade policies” designed to bully individual countries. Thus, he has argued that it is paramount for Asia to unite and have closer economic ties with China. Malaysia, it is believed, wanted to conclude the RCEP deal even without India, but many others are not in favour.
Many ASEAN members are keen to have India on board before the deal is sealed mainly to ensure that the two Asian giants will balance each other to the benefit of smaller ASEAN nations. Before the rise of India, the U.S. was seen as the balancing force against possible Chinese domination. [IDN-InDepthNews – 04 November 2019]
Photo source: ASEAN
IDN is flagship agency of the International Press Syndicate.
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