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Correct decision for RCEP to push on, even without India
WITH the negotiations for the mega regional free trade agreement (FTA) known as the Regional Comprehensive Economic Partnership (RCEP) almost at the finish line, there were still question marks if the world's most powerful trade bloc could ever see the light of day largely because of the resistance by one of its key members.
In the end, after 28 rounds of gruelling talks spanning seven long years, India - the third-largest of the 16 economies involved after China and Japan - surprised many by withdrawing from the RCEP altogether at the eleventh hour.
At the end of a summit in Bangkok on Monday, Indian Prime Minister Narendra Modi wrote on Twitter that the deal's present form "does not fully reflect the basic spirit and agreed guiding principles" of the RCEP.
He added that "it does not address satisfactorily India's outstanding issues and concerns".
New Delhi's resistance to the RCEP has been well-documented in recent months.
Mr Modi's government has long expressed its concerns about market access, fearing domestic industries would be hit hard if the country was flooded by cheap goods manufactured in China as well as agricultural produce from Australia and New Zealand that would harm local producers.
Still, despite India's abrupt pull-out, there is an open invitation for the country to rejoin the RCEP family whenever it feels ready.
Big win for global trade
While the absence of India is undoubtedly a significant blow and does devalue the pact somewhat, the fact that the other 15 nations managed to make difficult trade-offs and collectively decide to soldier on represents a big win for the multilateral trading system.
The 15 include all 10 members of the Association of Southeast Asian Nations grouping (of which Singapore is a part of), along with China, South Korea, Australia, Japan and New Zealand.
They declared in a joint statement on Monday that they have concluded the text-based negotiations for all 20 chapters in the RCEP, as well as all the market access issues.
The next step is to go through the legal scrubbing process ahead of a signing that is now widely expected to take place in Vietnam - the next Asean chairman - in 2020.
Of course, even after it is signed and ratified by each country, the actual implementation could take months to begin and several years to complete.
This is unsurprising given how diverse the 15 countries are, both in terms of size and the maturity of their respective economies.
But what's clear is that the first major step has been taken to create a substantive FTA that is poised to be the world's largest if it eventually becomes operational.
The participating countries comprise nearly a third of the global population (this would have been almost half if India was counted).
The RCEP members account for about 30 per cent of the world's gross domestic product (close to US$25 trillion).
Need to act quickly
The persistent trade tensions between the United States and China and the rise of protectionism around the world arguably gave fresh impetus for the RCEP nations to push ahead to conclude the negotiations this year. The talks had chugged along quite slowly in the first few years.
One can be sure that China - the main backer of the RCEP - will try to get the deal in force as soon as possible, for it will go a long way to cementing the country's standing as the main economic and trading partner in East and South-east Asia.
As Singapore Prime Minister Lee Hsien Loong noted, the RCEP is taking shape at a time when multilateralism is "losing ground" and global economic growth is slowing.
The RCEP's long-term aim is to break down trade barriers and promote investment to help emerging economies catch up with the rest of the world.
All things considered, it was the correct decision by the 15 remaining RCEP countries to carry on, even without India.
Asean, too, can hold its head up high for successfully maintaining its centrality in helping to push for greater regional economic integration.