ALTHOUGH India has exited the Regional Comprehensive Economic Partnership (RCEP) negotiations, trade experts still view its participation as crucial and "indispensable" for the deal to succeed.
At Thursday's Bangkok Post International Forum 2019 on "Asia 2020: Trade Wars, RCEP and Economic Trends", business leaders and trade negotiators from Thailand, Japan, India and China discussed the viability of an upcoming RCEP deal and the likelihood of India's involvement.
"India has significant outstanding issues that remain unsolved, but all RCEP countries will work together to resolve these issues in a mutually satisfactory way," said Akihiko Tamura, deputy director general for trade policy at Japan's Ministry of Economy, Trade and Industry.
The RCEP saw a major setback when India, one of the RCEP's 16 members, said during the recent Asean Summit here that it was pulling out of the talks as there were many unresolved issues.
India has about twice the population of Asean and is the deal's largest stakeholder after China.
Among the reasons for its withdrawal is fear that it would only exacerbate trade deficits already made worse by previous regional free trade agreements.
"Some countries have said the door is open to India for negotiations, but leaving the door open is not enough. We have to be proactive in bringing India back in, and this has been Japan's consistent position," Tamura said.
He said Japan will work with Asean to find a way to get India back to the negotiating table so a deal can be signed in 2020.
He added that solutions to India's concerns were on the table and a resolution could be in the near future.
Indian representatives have raised concerns about a variety of sectors like manufacturing that would be severely affected by a trade deal based on an inability to compete in a pan Asian free market.
Indian multinational Tata Sons Ltd resident director of Asean K. V. Rao said that if RCEP members wanted India's participation, the final deal must be flexible and open to a wide range of accommodations.
"The three most important factors for India when it comes to trade deals are the figures and real number values of trade, the perception of the trade deal will create to Indian citizens and the politics of the deals for the top leaders," he said.
For example, a previous trade deal with China led to a significant imbalance in trade between the two countries, particularly in manufacturing.
"The objective of any economic cooperation is to lift up the people, improve quality of life, improve economic indexes, foster sustainability and generally make the world a better place," he said.
Thailand’s director general of the Trade Negotiations Department Auramon Supthaweethum said that despite the setbacks, the RCEP deal had the potential to dramatically improve economic prospects among its members.
She said that to get relevant parties cooperating, the deal must be balanced, spreading its benefits among stakeholders while providing remediation to the inevitable losers in the FTA.
President of the Japan External Trade Organization (Jetro) in Bangkok, Atsushi Taketani said that while the international trade order was uncertain and not transparent, the region had shown a commitment to free trade.
"In Asean, many countries have Japanese business, so the RCEP will support Japan's companies," he said.
"Including India in the RCEP is quite important for Asean nations, as India is a large trading partner, especially for Malaysia and Indonesia," he added.
Meanwhile, China is making big moves to open up its economy to free trade with hopes that the RCEP deal could offset lower exports to the United States with increased shipments to new markets in Asia.
The RCEP combined with China's Belt and Road Initiative to integrate supply chains in Asia will only further cement the country as the regional powerhouse.