RCEP could be world’s largest trading bloc . . .
The U.S.-China trade war and rising protectionism have given new impetus to years of slow moving negotiations in Asia on what could be the world’s largest trade deal, the Regional Comprehensive Economic Partnership (RCEP). Heading into this past weekend's ASEAN Summit in Bangkok, there were high hopes for finalizing negotiations and agreeing to terms for the deal. But India pulled out at the last minute. Despite India’s opposition, the Thai government said Monday that negotiations will move forward and that it expects a deal to be signed – perhaps without India – as early as February 2020. That deal could include the 10 ASEAN members, plus Australia, China, Japan, New Zealand, and South Korea.
Other trade deals in play . . .
India’s concerns about a flood of cheap, mass-produced Chinese goods hurting its small businesses, as well as the impact of free agricultural trade with Australia and New Zealand on India’s tens of millions of small-scale farmers, ultimately derailed hopes of finalizing the pact over the weekend. Despite the RCEP impasse, other economies are moving ahead with other initiatives. New Zealand announced Monday that it has concluded a deal to upgrade its free trade agreement with China, which has been under negotiations for years. Likewise, economic pressures wrought by the U.S.-China trade war appear to be inciting greater openness among previously unenthusiastic governments, including Malaysian Prime Minister Mahathir Mohamad, who now notes that “ASEAN is quite a big market for the whole world. We don’t want to go into a trade war.”
U.S., Canada play catch-up . . .
In addition to U.S. national security adviser Robert O’Brien attending the ASEAN Summit, U.S. Commerce Secretary Wilbur Ross also travelled to Bangkok. He’s leading an executive trade mission from November 3-to-8 as U.S. businesses and government seek to emphasize the American commitment within a region where U.S. President Donald Trump’s absence has been keenly noted. Ross heralded a number of figures on trade and investment between the U.S. and what Washington calls the ‘Indo-Pacific’ at the parallel Indo-Pacific Business Forum, also in Bangkok. Meanwhile, Canada sent its regrets to the ASEAN chair, and was not invited as an observer to the parallel East Asia Summit, despite previous attempts at engagement. This is a worrying sign for Canada’s place in trade and security dialogue with the region.