India Must Keep RCEP Option Open

In the meantime, New Delhi must enter into FTAs with New Zealand and Australia, and persuade China to invest in the country

- G Parthasarathy

The remarkable rise of China’s power and influence was evident in the Bangkok East Asia Summit, despite the fact that, as in the past, the Chinese delegation was led not by the country’s supreme leader President Xi Jinping, but by its low key Prime Minister, Li Keqiang.

While Prime Minister Li’s presence symbolised Chinese commitment to larger causes in East and South-East Asia and the Indo-Pacific region, the Trump Administration showed its disdain for the ASEAN, through the absence of its President, Vice-President, or Secretary of State, leaving the door open for an unchallenged assertion of Chinese power.

There are, no doubt, loud American statements, purporting to show the determination to contain Chinese power. The withdrawal of the Trump Administration from participation in the Trans-Pacific (Economic) Partnership, however, has manifested the reality that despite Trump’s tough actions of economic sanctions on China, there is no clear American strategy to respond appropriately, to assertive Chinese power. This objective can be achieved only if the US works closely in regional and global forums with partners like Australia, Japan, Vietnam, Indonesia and India.

It was inevitable that in this background, China has become the de facto leader in a huge free trade area, extending across the eastern boundaries of the Indian Ocean and the Western Pacific, from India to the Philippines.

One cannot blame India for declining to join this partnership, given the serious challenges India’s economy faces at present.

Already facing a deficit of $57 billion in its trade with China, India needed to protect its economy against a certain surge in Chinese exports, if its current duties were reduced. New Delhi also has concerns of cheap goods of Chinese origin being diverted to India, through ASEAN countries, which enjoy free trade access in India.