Asia’s trade negotiators decide they can no longer wait for India

Nov 08, 2019

STUFF TOO many sheaves of paper into a stapler and it will struggle to fasten them together, however thin each page may be. The same is true of the Regional Comprehensive Economic Partnership (RCEP), a long-delayed trade deal involving 16 Asian countries. RCEP was intended to bind together all of the existing trade agreements between the Association of South-East Asian Nations (ASEAN) and the region’s other big economies, including China, Japan, South Korea, Australia, New Zealand and India. But adding India to the pile has caused the mechanism to jam.

At a summit this week in Bangkok, the region’s leaders announced that 15 of the 16 participants had concluded their talks and would be ready to sign a deal in February, after the text was given a good “legal scrubbing”. But India was not yet ready to join them. “Neither the talisman of Gandhiji nor my own conscience permit me to join,” said Narendra Modi, India’s prime minister, invoking Mohandas Gandhi (pictured), who preached self-reliance and relished the frugality it requires.

Although India and China have free-trade pacts with ASEAN, they do not have an agreement with one another. Many in India fear that lowering tariffs on Chinese goods will only increase its yawning trade deficit with the country (see chart). They also worry that India’s poor farmers will be...


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