India urged to seal trade pact with S-E Asian nations2 min read . Updated: 19 Jul 2018, 11:42 PM IST
India, Asean need to double down on course of deal, says Singapore foreign minister
New Delhi: Singapore foreign minister Vivian Balakrishnan on Thursday prodded India to speedily conclude a regional trade pact with South-East Asian countries and its partners in East Asia, including China, against the backdrop of a pushback against free flowing trade by some countries.
The economic benefits of such a deal were real given that India and the South-East Asian grouping were estimated to have a combined gross domestic product (GDP) of $3.8 trillion-4.5 trillion, Balakrishnan said at the Delhi Dialogue that brings together governments and think tanks from India and the 10 Asean countries.
“South-East Asia and India hold tremendous potential that can be unlocked through further integration," Balakrishnan said. “When there is a pushback against trade liberalization in some of the more advanced parts of the world, it is all the more important for India and the Asean to double down on the course of free trade. Specifically at this time, we need to work towards the conclusion of the Regional Comprehensive Economic Partnership (RCEP) and hopefully do so by the end of this year," he said, adding that the talks offered the opportunity to create the world’s largest trading bloc.
Balakrishnan’s comments come amid an ongoing trade war between the US on one hand and China, the European Union and Canada on the other. The US move comes against the backdrop of President Donald Trump’s election promise of ensuring “fair trade" in favour of the country with steps to penalize countries enjoying a trade surplus with the US.
Asean groups together Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. India launched its “Look East policy" aiming to forge closer economic and political links with the Asean in 1992 and became a dialogue partner of the grouping in 1996.
Asean and India, South Korea, China, Australia, New Zealand and Japan launched negotiations in 2013 on the RCEP, which covered trade in goods, trade in services, investment, economic and technical cooperation, intellectual property, competition, dispute settlement, e-commerce besides small and medium enterprises.
However, an agreement has been held up mostly because of India’s reluctance to substantially open up its market to China with whom it has an unsustainably high trade deficit of $63 billion in 2017-18. Many countries want India to open up its market for 92% of traded goods, with India only ready to offer market access up to a maximum of 85% items with deviations for countries like China, Australia and New Zealand with whom it does not have a free-trade agreement.
India believed that the RCEP presented “a decisive opportunity to further engage our eastern neighbours economically," Indian foreign minister Sushma Swaraj said.
“We hope that we can finalise the negotiations as soon as possible," she added.
Swaraj also spoke of India’s vision for the Indo-Pacific which was that the region “must be a free, open and an inclusive region," that follows “a common, rules-based order," taking into account “the equality of all, irrespective of size and strength."
“It should allow use of common spaces on sea and in the air," she added, in a possible reference to China aggressively claiming large parts of the South China Sea as its territorial waters and imposing strictures against navigation and overflight in the region.