As the end of 2020 draws near, the Regional Comprehensive Economic Partnership (RCEP) will soon reach the long-awaited agreement. The 15 participant countries that include 10 ASEAN nations along with Japan, China, South Korea, Australia, and New Zealand will hold a virtual summit on November 15.
After several rounds of negotiations, India decided to drop out of the free trade agreement citing the deal’s potential impact on the livelihoods of its most vulnerable citizens. However, Japan has been hesitant about joining the China-backed trade deal without India.
India and Japan are both a part of the Quad along with the US and Australia. With the US’ hardline approach on China, Japan may be in a position where it is entering an agreement with Beijing that has sought to conclude it as early as the end of this year, even if it is done without India.
“We aren’t thinking about that at all yet,” Deputy Minister for Economy, Trade, and Industry Hideki Makihara, said in an interview with Bloomberg. “All we are thinking of is negotiations including India.”
“It is meaningful from the economic, political, and potentially the national security point of view,” Makihara said last year. “Japan will continue to try to persuade India to join.”
However, New Delhi has shown no interest in reconsidering the trade deal again. New Delhi fears a further increase in trade deficit with China and the removal of trade barriers under RCEP, would hurt the domestic manufacturers at a time when India is trying to accelerate its growth in manufacturing through the ‘Make in India’ initiative.
“India’s concerns come mostly from its fragile economic structure, which is heavily reliant on agriculture and inadequate in terms of industry and infrastructure,” Zhou Rong, a senior research fellow at the Chongyang Institute for Financial Studies at the Renmin University of China, told the Global Times.