Asian leaders plan to sign the world's largest regional trade deal next year as India said it's not ready to join.
Indian Prime Minister Narendra Modi decided not to join the Regional Comprehensive Economic Partnership, or RCEP, in order to protect service workers and farmers, an official told reporters in New Delhi on Monday.
India had pushed the other 15 nations to address its concern over deficits and open their markets to Indian services and investments, the official said.
"India has significant outstanding issues, which remain unresolved," RCEP countries said in a joint statement yesterday.
"All RCEP Participating Countries will work together to resolve these outstanding issues in a mutually satisfactory way. India's final decision will depend on satisfactory resolution of these issues," said the statement.
"We have conveyed to the participating countries that we will not be joining the RCEP," Vijay Thakur Singh, a senior diplomat in charge of East Asia for India's Ministry of External Affairs, told reporters.
"India is welcome to join RCEP whenever it's ready," Vice Foreign Minister Le Yucheng told reporters in Bangkok. Asian leaders had hoped to announce a breakthrough on the trade pact this week but for now will push ahead without India.
"It's the 15 nations that have decided to move forward first," Mr Le said, adding that a few issues won't be completed before the end of the year.
"There won't be any problem for the 15 nations to sign RCEP next year," he added. "We are taking an open attitude -- whenever India is ready, it's welcome to get on board."
China has sought to accelerate the pact covering a third of the global economy as it faces slowing growth from a trade war with the US, which withdrew from the Trans-Pacific Partnership after Donald Trump took office in 2017.
A deal would further integrate Asia's economies with China just as the Trump administration is urging Asian nations to shun Chinese infrastructure loans and 5G technology.
India has long been the main holdout on due to domestic opposition over worries it would be flooded by cheap goods from China. It made last-minute demands in the run-up to the Bangkok meetings that ended up derailing the talks.
Deputy Prime Minister and Commerce Minister Jurin Laksanawisit said that regarding the market access concerns that India has, the rest of the RCEP nations will give the country time to thrash out a solution before the deal is signed next year in Vietnam, which will take over as the next Asean chair.
The other 15 negotiators yesterday finally agreed upon the pact's 20 chapters after seven years of negotiations since 2012, Mr Jurin said.
A government source said that the Thai government was grateful to Singapore, which was the previous Asean chair, for its role in pushing through a successful conclusion to the RCEP negotiations.
The source added that the negotiators from the 15 countries had agreed to give India more time to solve internal issues and clear the air with stakeholders as it weighs joining the deal later.
The pact will come into force after it is ratified by the 15 countries -- a process which will take up to one year and a half.
The RCEP includes all 10 Southeast Asian countries plus China, Japan, South Korea, Australia and New Zealand.
Speaking at the 22nd Asean Plus Three Summit, South Korean President Moon Jae-in said that the conclusion of the RCEP negotiations will have a positive impact on the global economy.
"The conclusion of the RCEP will contribute to free trade and growth in investment in the region as well as peace and shared prosperity in East Asia. [It] will lead to the opening of markets in the region as soon as possible," Mr Moon said.
"I also hope that this meeting will be an opportunity to strengthen cooperation, protect the free trade order, and lay a foundation in the East Asia community," he added.
Trade negotiators from the 16 countries have locked horns over issues concerning the pact's 20 chapters for several years. Six remaining chapters have yet to be agreed on -- namely trade competition rules, and measures to mitigate the negative side-effects of the RCEP, which seeks to deepen economic relationships between its signatories through free trade.
Free trade had been a sensitive issue throughout the negotiations, and only slow progress has been made since its initiation in 2012, mainly due to the lack of free trade agreements between some partners, such as between China and Japan and India and China.
The original 16 proposed signatory countries to the RCEP have a combined population of about 3.56 billion, roughly half the world's people, with a trading volume of more than US$10.3 trillion (328 trillion baht) or 29% of world trade.
