China seeks talks with India to push Asia trade pact

[Kailash Kumar]

China seeks talks with India to push Asia trade pact

January 01 2019

Bloomberg/New Delhi

China has sought talks with India to allay concerns on a regional free trade pact it is spearheading, two people familiar with the matter said, as Beijing seeks newer markets amid the ongoing trade war with the US.

The 16-country Regional Comprehensive Economic Agreement has been in the works for a while and China is keen to conclude it by end of 2019, the people said, asking not to be identified as the matter is not public.

India’s wariness about a possible flood of Chinese goods, and its demand for looser immigration rules for its tech professionals remain sticking points.

China’s inability to close the trade deal highlights the continuing suspicion among its Asian trading partners over Beijing’s effort to increase its influence in the region.

RCEP, along with the Belt and Road Initiative to build investment and trade links with countries along the old Silk Road to Europe, is a key element in China’s efforts to seize the geopolitical advantage following what many in the region see as a US retreat under President Donald Trump.

India’s foreign ministry didn’t immediately respond to a message seeking comments.
China’s commerce and foreign affairs ministries didn’t immediately respond to a fax.

The meeting is likely to take place before the end of this month, and New Delhi has drawn up a list of issues it will take up with Asia’s largest economy.

That includes providing zero-duty access to fewer Chinese goods as opposed to those offered to other members of RCEP.

It also will seek a longer period to phase out levies on Chinese goods compared to 20 years offered to the others.

India’s imports from China have been rising for a while with the deficit reaching $55.6bn in 2017 compared to $48.19bn in 2015.

A resolution of the stalemate appears unlikely any time soon as RCEP member countries like Australia, India and Indonesia go into elections in 2019.

Apart from China, India is planning to reach out to key players like Singapore and Australia to seek a consensus on these issues.

https://www.gulf-times.com/story/618053/China-seeks-talks-with-India-to-push-Asia-trade-pa

 

[GeraltofRivia]

India is clearly quite conscious about what TPP means and it appears to put its sovereignty over the economical benefit that may come with the foreign investment. It equally worries that it may be disadvantaged in RCEP in which China has too much power there, which is fairly understandable. It does not want to be left out from major trading bloc either. So I guess its best play would be to use its size and growth potential as a leverage to get the best possible term in RCEP.

I really hope China and India can reach an agreement in 2019, which will provide a solid endorsement to the overall completion of RCEP. Some reasonable compromises could be made from China (e.g.. less favorable treatment of duty) but it should be a good price to pay IMO. If this trading bloc can be formed, it will become the world's large economic bloc and includes two of the largest developing nations, covering nearly half of the global economy (in terms of PPP GDP). The long term impact to the world economic order will be gigantic..