By Zhang Hao
November 21, 2019
When 16 nations met early this month at a trade summit in Bangkok, hoping to iron out the terms of the Regional Comprehensive Economic Partnership (RCEP) through extensive negotiations, India became the only exception with its surprising withdrawal from the regional trade deal.
Officially launched in 2012, the RCEP negotiations brought together the 10 member countries of the Association of Southeast Asian Nations (ASEAN) and six other trade partners in the region, namely China, Japan, South Korea, India, Australia and New Zealand. India’s abrupt decision left the mega free-trade pact likely to be signed without it in 2020, as 15 participating countries concluded their text-based discussions.
Within a few months of taking office in May 2014, Indian Prime Minister Narendra Modi shifted the “Look East Policy,” which was implemented in the 1990s, to an “Act East Policy,” claiming the latter was more “progressive” than the former in terms of India’s integration into the Asia-Pacific region.
Analysts thought the new policy was a pragmatic diplomatic strategy in response to the new global political and economic situation after the end of the Cold War. India’s ambition was to achieve its strategic goals by increasing cooperation with Southeast and East Asian countries in such areas as politics, economy and security, they said.
Five years on, India is yet to match its words and ambitions with real action. With the Act East Policy below its expectations, India is again facing hard realities.
Behind Act East Policy
In 2015, India launched a new Maritime Security Strategy (IMSS-2015) to complement the Act East Policy. The strategy incorporates the Andaman Sea connecting India and Southeast Asian countries into the concept of the “Indian Ocean Region,” thus raising its position in India’s diplomatic and geopolitical priorities to the regional level of core concerns.
At the same time, India has made the Asia-Pacific region, especially East and Southeast Asian countries, one of its hot spots for the first time, with its level of geographical focus listed as only next to those around the Indian Ocean Region.
In recent years, India’s foreign trade has been growing. According to data released by the Indian Ministry of Commerce and Industry, Asian nations account for nearly 49% of its overall foreign trade, of which trade with East Asia accounts for about 23% of its total trade volume, while its trade with the United States amounts to 20.18%, followed by 19.26% with Europe, 9.56% with Africa, and 0.92% with the Commonwealth of Independent States. In other words, imports from and exports to East Asia have already taken up the largest share of India’s overall foreign trade.
India’s reasons for putting more diplomatic priority on East Asia are more in the interests of economic relations and other factors, rather than only limited to maritime exchanges.
Under the leadership of Modi’s government, India has been actively engaged in diplomatic and maritime exchanges with governments in other countries, especially the Pacific region. As part of the Act East Policy, it has increased diplomatic and maritime cooperation with all East Asian countries.
Limitations of Act East Policy
Since 2015, India has carried out joint maritime-law enforcement patrols and military exercises with ASEAN countries such as Indonesia, Myanmar, Thailand and Vietnam, and held maritime military exercises involving 16 countries in 2016 and 2018. In East Asia, India has also established maritime security cooperation with Japan. In 2016, it invited Japan and the United States to participate in the Malabar naval exercise. The Act East Policy has achieved relatively fruitful results in the military and defense fields.
In contrast to the great progress in the field of defense and security cooperation, important economic agreements signed between India and East Asian countries are rather scarce. So far, India has only signed a memorandum of cooperation on oceans and fisheries with South Korea. The two sides said in their joint statement that they would encourage more maritime cooperation and seek further partnership in the shipbuilding industry. It can be said that India has been hesitant in implementing the Act East Policy and has not done enough in cultural and economic exchanges and strategic coordination.
India’s withdrawal from the RCEP again reflects the limitation of the piecemeal Act East Policy. Given India’s original intention of comprehensive engagement and the small economic progress it has made apart from defense affairs, its indecision in economic cooperation was not only derived from its national strength, but also a testament to its lack of confidence. After all, economic cooperation means opening up the Indian market and that the competitiveness of Indian domestic companies will be tested.
Cooperation, not confrontation
It is fair to say that India’s inclination toward the world’s largest economic engine through its aggressive Act East Policy is quite reasonable. However, the limitation and confrontation characteristics of the policy have gotten in the way of its achievements. It’s even more so this year as the United States terminated preferential trade status for India under the Generalized System of Preference (GSP). More than 2,900 kinds of Indian exports to the United States, worth about US$5.6 billion, no longer enjoyed preferential tariff reductions.
Coupled with the stalemate of the domestic economic reforms, India’s annualized GDP growth rate has now fallen below 6%. If it wants to get out of that predicament, India must come up with a more transformative and sincere cooperation policy.
The limitation of the Act East Policy to defense cooperation adds “aggression” to the policy. But truly to integrate into the Asia-Pacific economic circle, India must cooperate with East Asia and Southeast Asian countries in various fields such as culture, economy and politics, although this requires India’s domestic economy to be ready for opening up. Nevertheless, as the opportunities outweigh the challenges, India should take the initiative to seek changes to the current situation. Only cooperation can bring a win-win result. Otherwise, the vision of the Act East Policy can only turn into an illusion.
(This article was first published on Asia Times Chinese. Translated by Guo Fengqing and Xu Yuenai.)
Source: Asia Times “India’s ‘Act East’ policy falls flat”
Note: This is Asia Times’ article I post here for readers’ information. It does not mean that I agree or disagree with the article’s views.
That is why Japan and Australia join China-led RCEP though they are scared by China’s rise.
Former Australian PM Tony Abbott seems more scared by than desiring to benefit from China’s rise so that according to news 18.com’s report “RCEP ‘Looks Like Trade Arm’ of China’s Belt and Road Initiative, Says Former Australian PM Tony Abbott”, he is unhappy that China’s success in forming RCEP supplements China’s Belt and Road initiative to facilitate China’s economic expansion in the areas to China’s west through win-win cooperation.
If he was Australian PM perhaps he would not allow Australia to join RCEP, however current Australian PM, though scared by China’s rise and wants to contain China along with the US and Japan, wants, on the other hand, to benefit from China’s rise so that Australia will willingly become a RCEP member.
Abbott could only call Indian PM Modi to tell India not to join RCEP. Modi has refused to join RCEP but not because of Abbott’s persuasion but out of India’s own interests. However, Modi is shortsighted as his refusal to join RCEP and BRI, in the long run, will make India unable benefit from the integration of Asian economy through BRI and RCEP.
Comment by Chan Kai Yee on news 18.com’s report, full text of which can be viewed at https://www.news18.com/news/world/rcep-looks-like-trade-arm-of-chinas-belt-and-road-initiative-says-former-australian-pm-2394459.html.
It might as well be
The Comical Empire
Pepe Escobar 9 Nov 19
Chinese President Xi Jinping six years ago launched New Silk Roads, now better known as the Belt and Road Initiative, the largest, most ambitious, pan-Eurasian infrastructure project of the 21st century.
Under the Trump administration, Belt and Road has been utterly demonized 24/7: a toxic cocktail of fear and doubt, with Beijing blamed for everything from plunging poor nations into a “debt trap” to evil designs of world domination.
Now finally comes what might be described as the institutional American response to Belt and Road: the Blue Dot Network.
Blue Dot is described, officially, as promoting global, multi-stakeholder “sustainable infrastructure development in the Indo-Pacific region and around the world.”
It is a joint project of the US Overseas Private Investment Corporation, in partnership with Australia’s Department of Foreign Affairs and Trade and the Japan Bank for International Cooperation.
Now compare it with what just happened this same week at the inauguration of the China International Import Expo in Shanghai.
As Xi stressed: “To date, China has signed 197 documents on Belt and Road cooperation with 137 countries and 30 international organizations.”
This is what Blue Dot is up against – especially across the Global South. Well, not really. Global South diplomats, informally contacted, are not exactly impressed. They might see Blue Dot as an aspiring competitor to BRI, but one that’s moved by private finance – mostly, in theory, American.
They scoff at the prospect that Blue Dot will include some sort of ratings mechanism that will be positioned to vet and downgrade Belt and Road projects. Washington will spin it as a “certification” process setting “international standards” – implying Belt and Road is sub-standard. Whether Global South nations will pay attention to these new ratings is an open question.
The Japanese example
Blue Dot should also be understood in direct comparison with what just happened at the summit-fest in Thailand centered on the meetings of East Asia, the Association of
Southeast Asian Nations and the Regional Comprehensive Economic Partnership (RCEP).
The advent of Blue Dot explains why the US sent only a junior delegation to Thailand, and also, to a great extent, why India missed the RCEP train as it left the pan-Asian station.
Indian Prime Minister Narendra Modi is still between a rock – Washington’s Indo-Pacific strategy – and a hard place – Eurasia integration. They are mutually incompatible.
Blue Dot is a de facto business extension of Indo-Pacific, which congregates the US, Japan, Australia – and India: the Quad members. It’s a mirror image of the – defunct – Obama administration Trans-Pacific Partnership in relation to the – also defunct – “pivot to Asia.”
It’s unclear whether New Delhi will join Blue Dot. It has rejected Belt and Road, but not, finally and irrevocably, RCEP. ASEAN has tried to put on a brave face and insist differences will be smoothed out and all 16 RCEP members will sign a deal in Vietnam in 2020.
Yet the bottom line remains: Washington will continue to manipulate India by all means deemed necessary to torpedo – at least in the South Asian theater – the potential of Belt and Road as well as larger Eurasia integration.
And still, after all these years of non-stop demonization, the best thing Washington could come up with was to steal Belt and Road’s idea and dress it up in private bank financing.
Now compare it, for instance, with the work of the Economic Research Institute for ASEAN and East Asia. They privilege the ASEAN Outlook on the Indo-Pacific, an original Indonesian idea, instead of the American version. The institute’s president, Hidetoshi Nishimura, describes it as “a guideline for dialogue partners” and stresses that “Japan’s own vision of the Indo-Pacific fits very well with that of ASEAN.”
As much as Nishimura notes how “it is well known that Japan has been the key donor and a real partner in the economic development of Southeast Asia throughout the past five decades,” he also extols RCEP as “the symbol of free trade.” Both China and Japan are firmly behind RCEP. And Beijing is also firmly stressing the direct connection between RCEP and Belt and Road projects.
In the end, Blue Dot may be no more than a PR exercise, too little, too late. It won’t stop Belt and Road expansion. It won’t prevent China-Japan investment partnerships. It won’t stop awareness all across the Global South about the weaponization of the US dollar for geopolitical purposes.
And it won’t bury prevailing skepticism about the development project skills of a hyperpower engaged on a mission to steal other nation’s oil reserves as part of an illegal Syrian occupation.
Source: Anti-Empire of checkpointasia.net “Is This a Joke? US Launches ‘Blue Dot Network’ as Answer to China’s Belt and Road”
Note: This is checkpointasia.net’s article I post here for readers’ information. It does not mean that I agree or disagree with the article’s views.
China, Japan, ASEAN and others to write up treaty for ratification by June
MASAYUKI YUDA, Nikkei staff writer
November 08, 2019 18:09 JST
Photo Thai, Indian PMs
BANGKOK — A historic Asia-Pacific trade pact may come into force without one of the biggest participants — a hesitant India — a top Thai official indicated on Friday.
“The Regional Comprehensive Economic Partnership can take effect after at least six countries from the Association of Southeast Asian Nations and four other participating nations ratify it,” said Auramon Supthaweethum, director-general of the Department of Trade Negotiations in Thailand’s Ministry of Commerce.
She said she expects RCEP to launch in 2021.
Sixteen nations — the 10 ASEAN states plus China, Japan, South Korea, Australia, New Zealand and India — had been aiming to conclude the pact at an RCEP Summit held this past Monday.
India, however, put up a last-minute fight for safeguards, in view of its large trade deficits with other members — especially China. New Delhi’s resistance stalled the process, but Auramon confirmed there is still a way forward with or without India.
The Indian government has sent mixed signals since the contentious summit, hinting it intends to completely drop out but also suggesting it is open to further negotiations. The Thai director-general emphasized that India is still an RCEP member, but also said “RCEP members do not have a timeline to resume talks with India.”
The 15 other nations, having concluded talks on all 20 chapters of the agreement during the summit period, have decided to go ahead and introduce legislation toward ratification. This process is expected to take until next June, according to Auramon.
The participants plan to review the RCEP agreement every five years, she revealed.
Even without India, Auramon said RCEP would still be the largest trade pact in history.
But the new bloc would be much smaller than envisioned, covering 2.2 billion people rather than 3.6 billion. Its gross domestic product, which would have accounted for about one-third of global GDP, would be down to 29% of the worldwide figure.
Source: Nikkei Asian Review “RCEP trade deal can take effect without India, Thailand confirms”
Note: This is Nikkei Asian Review’s article I post here for readers’ information. It does not mean that I agree or disagree with the article’s views.
Panu Wongcha-um, Patpicha Tanakasempipat, Liz Lee
November 4, 2019 / 12:26 PM / Updated 15 hours ago
BANGKOK (Reuters) – China joined 14 countries on Monday in agreeing terms for what could be the world’s biggest trade pact, but India pulled out at the last minute on the grounds that the deal would hurt its farmers, businesses, workers and consumers.
India’s Prime Minister Narendra Modi arrives for a special lunch on sustainable development on the sidelines of the ASEAN summit in Bnagkok, Thailand, November 4, 2019. REUTERS/Soe Zeya Tun
The Sino-U.S. trade war and rising protectionism have given new impetus to years of negotiations on the Regional Comprehensive Economic Partnership (RCEP), which brings together the 10-member Association of Southeast Asian Nations (ASEAN), China, Japan, South Korea, Australia and New Zealand.
Members said the deal would be signed next year after the 15 countries without India reached agreement in Bangkok on the text and market access issues.
“Against the backdrop of a fast-changing global environment, the completion of the RCEP negotiations will demonstrate our collective commitment to an open trade and investment environment across the region,” the countries said in a statement.
They opened the door to India potentially joining them later, if the issues it has with the deal are resolved.
But Indian Prime Minister Narendra Modi said that he had to take into account the interests of Indian people.
“When I measure the RCEP Agreement with respect to the interests of all Indians, I do not get a positive answer,” Modi said in a speech in Bangkok, according to a government note.
“Neither the Talisman of Gandhiji nor my own conscience permit me to join RCEP,” he said, in a reference to “father of the nation” Mahatma Gandhi’s maxim to always think of the poorest in society in a situation of doubt.
India has been worried that the agreement, which requires the gradual elimination of tariffs, would open its markets to a flood of cheap Chinese goods and agricultural produce from Australia and New Zealand that would harm local producers.
Longstanding rivals China and India, who fought a border war in 1962, also clashed verbally in recent days over India’s decision to formally revoke the constitutional autonomy of the disputed Muslim majority state of Kashmir.
Even without India, the countries in the RCEP bloc account for nearly a third of global gross domestic product, but its departure means they have less than a third of the world’s population instead of around half.
“While I’m pleased that the 15 were able to conclude, it is a pity India proved unable to rise to the occasion. It was a massive missed opportunity,” said Deborah Elms of the Asian Trade Center in Singapore.
“In the meantime, this is excellent news for trade and Asia,” she said, noting that there was still time for India to sign.
Chinese Vice Foreign Minister Le Yucheng said: “Whenever India is ready they are welcome to come on board.”
An advantage for the other countries of having relative heavyweight India in the trade pact would have been less domination by China, particularly at a time they see the United States as a less reliable trade and security partner.
U.S. President Donald Trump’s administration sent a lower level delegation this year than it has previously to the back-to-back East Asian Summit and U.S.-ASEAN Summit.
Because of the downgrade in the U.S. delegation, officials from only three of the 10 regional countries joined the usual U.S.-ASEAN meeting.
U.S. Commerce Secretary Wilbur Ross told a business meeting on the sidelines of the summit that the Trump administration was “extremely engaged and fully committed” to the region.
White House national security adviser Robert O’Brien brought an invitation to a summit from Trump himself and pleased some Southeast Asian leaders by criticizing Chinese actions in the disputed South China Sea.
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.
Additional reporting by Neha Dasgupta and Manoj Kumar in New Delhi, Panarat Thepgumpanat in Bangkok; Writing by Matthew Tostevin; Editing by Alex Richardson
Source: Reuters “India rejects China-backed Asian trade deal, as others move ahead”
Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.
CGTN says in its article “Trade deal tops agenda at upcoming ASEAN summit” that the Regional Comprehensive Economic Partnership (RCEP) will be signed at ASEAN summit November 2-4.
“Chinese Prime Minister Li Keqiang, Japanese Prime Minister Shinzo Abe and South Korean President Moon Jae-in are confirmed to attend as senior figures from ASEAN’s dialogue-partner nations,” CGTN says.
“The Regional Comprehensive Economic Partnership (RCEP) is a planned agreement between the 10 countries of ASEAN and six more nations: China, India, Japan, South Korea, Australia and New Zealand. The bloc accounts for half the world’s population and a third of global trade.”
Comment by Chan Kai Yee on CGTN’s report, full text of which can be viewed at https://news.cgtn.com/news/2019-10-28/RCEP-tops-agenda-at-upcoming-ASEAN-summit-LajwwXScDu/index.html.
Patpicha Tanakasempipat October 18, 2019 / 7:23 PM / Updated 12 hours ago
BANGKOK (Reuters) – Thailand has a “good feeling” that a China-backed free trade pact for countries with nearly half the world’s population will be agreed this year after years of delay, a Thai official said on Friday.
Negotiators for the 16-nation Regional Comprehensive Economic Partnership (RCEP) are in the Thai capital this week to try to finalize what could become the world’s largest free trade zone with a third of global gross domestic product.
Progress in talks that began in 2012 has been held up by disputes between China and India over access to markets and lists of protected goods. India wants safeguards to be built into the proposed pact to prevent a sudden surge in imports.
But Thailand said the trade agreement was on track to be concluded while it chairs the 10-member Association of Southeast Asian Nations (ASEAN) this year – and ideally before an RCEP summit on Nov. 4.
“We still have a good feeling … that all 16 members, including India, are willing to try to solve the remaining differences,” said Auramon Supthaweethum, director-general of Thailand’s Department of Trade Negotiations. “Our target is still to have a good deal by the end of this year.”
First proposed by China, RCEP comprises the ASEAN member states and six Asia-Pacific countries: China, India, Japan, South Korea, Australia and New Zealand. ASEAN has existing free-trade agreements with all six Asia-Pacific countries.
RCEP members were working on two parallel negotiations, on market access in goods and services, and on a draft agreement text, the official said.
Market access negotiations, conducted bilaterally, were already 80.4% completed, with 16% of the remainder “near conclusion,” Auramon said, adding that an outstanding 3.6% still need to be discussed urgently.
Countries that don’t have existing free trade agreements with each other, such as China and India, may take longer in their talks, said Auramon.
“Members are spending the remaining period trying to get rid of some differences and trying to conclude talks,” she said.
“Because it’s done bilaterally, we don’t know the details of their discussions,” she added.
India has reached an agreement in principle with other countries to include a safeguard mechanism that would trigger duties if goods are deemed to have been dumped from a partner country, a source with knowledge of the negotiations told Reuters in India last week.
Fourteen chapters of the 20-chapter text have so far been approved by all members, Auramon said.
ASEAN and its partners will hold three more RCEP-related meetings before an RCEP summit early next month, where ASEAN leaders expect to announce the success of the talks.
“It’s a significant year, with global trade disputes and uncertainties, and nobody wants to lose out,” Auramon said.
(This story has been refiled to remove an extra word in paragraph 9, move paragraph 10 down to 12)
Reporting by Patpicha Tanakasempipat; Editing by Matthew Tostevin
Source: Reuters “Thailand says ‘good feeling’ over China-backed trade pact”
Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.