Singapore calls India a stabilizing factor, seeks its inclusion in RCEP3 min read . Updated: 02 Sep 2019, 01:01 AM IST
- The RCEP meet in Bangkok this month is aimed at closing a mega trade deal that has been in the works since 2012
- Countries negotiating RCEP comprise 25% of global GDP, 30% of global trade, 26% of FDI flows and 45% of the population
New Delhi: Singapore is supportive of India being part of the Regional Comprehensive Economic Partnership (RCEP) as it views Asia’s third largest economy as a stabilizing factor, K. Shanmugam, Singapore’s minister for law and home affairs, said at an event in New Delhi late on Saturday.
Shanmugam’s comment during a lecture on “Developments with Strategic Implications—Views from Southeast Asia" comes ahead of a key round of talks on the finalization of the mega trade deal this month in Bangkok. The countries working towards finalizing RCEP comprise a quarter of global gross domestic product, 30% of global trade, 26% of foreign direct investment flows, and 45% of the world’s population.
The Bangkok meet this month hopes to narrow differences in the deal that has been in the making since 2012.
India’s commerce minister Piyush Goyal did not attend a ministerial meet in China last month against the backdrop of Indian concerns of cheaper imports from China overwhelming India’s manufacturing sector, if India joins the grouping. India’s trade deficit with China in 2018 was more than $60 billion.
Representatives of iron and steel, dairy, textiles, marine products, electronics, chemicals, pharmaceuticals and plastic industries have been the most vocal against the trade deal.
Shanmugham clarified that some others in the proposed grouping that intends to bring together the 10 Association of Southeast Asian Nations (Asean) and their six free trade agreement (FTA) partners: China, India, Australia, New Zealand, South Korea and Japan do not hold the same view as Singapore. However, with the centre of economic gravity likely to shift to the Asia-Pacific region, India not being part of RCEP could leave the country at a disadvantage, he said.
“I think, so far, the view points across Asean...there are countries that would prefer India to be in and there are countries that would actually prefer India not to be in," Shanmugham said but did not name the countries opposed to India joining the proposed grouping.
“When they don’t want India to be in, that’s (for) a mix of economic and other reasons. We have thought that it’s much better to have everyone in but that is not necessarily because we are hoping to exploit the huge Indian market. We are very small so our ability to exploit these things is not that significant," he said.
“We look at it strategically, at how things can be stabilized and India’s presence is always a stabilizing factor and it is useful to have everyone in and everyone has a stake," he said.
“It is not a universally held view that India has to be brought in," Shanmugham said.
On India’s worries on the trade deficit front if it joins the RCEP, Shanmugam said: “Imagine a situation where this huge market I talked about—Asean at $2.8 trillion dollars growing at about 5%, some are growing even faster, China at $14 trillion growing on at 5-6%, Japan at $ 4 trillion dollars, South Korea—all in a free trade agreement and you are not in it. What do you think your position will be? It’s very stark. Unless you think that in this interconnected world you can do it all by yourself, because then you will be at a disadvantage, when you are dealing with the centre of gravity of the next 50 years. The centre of economic gravity is going to be the Pacific, the west coast of the US, China, Japan, South Korea, Asean."
“India is either part of it or not part of it. To me it looks important that countries are plugged in to the Pacific growth story but India may well have worked it out that if it can’t get the terms it wants, it is better off out or it has other options and India does have other options," the Singapore minister said. There “are strong possibilities for India and Asean to embark on greater cooperation."