14.11.2019 Author: Vladimir Terehov

Regular ASEAN Summits and Prospects for Proposed RCEP Free Trade Agreement

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The fate of the ASEAN Plus Six project has become a key issue at the annual ASEAN summits, the latest of which was held in Bangkok in early November. The proposed project would see the formation of the world’s largest free trade zone, made up of the Association’s 10 Southeast Asian member states (ASEAN itself), plus partner states China, Japan, India, the Republic of Korea, Australia and New Zealand.

The project is called the “Regional Comprehensive Economic Partnership” (RCEP) and should play a pivotal role by giving ASEAN a real reason to exist and lending the Association more weight, since it is currently being used as more of a pawn in an increasingly complex game between the world’s most powerful countries. If the project were to be a success, the political climate in the wider Indo-Pacific would also see a dramatic improvement.

The political climate in the Indo-Pacific is gloomy however, which makes the outlook for the RCEP look uncertain. Given the political realities that have been unfolding in the region, it would be nothing short of a (pre-)Christmas miracle if the RCEP were to form. This uncertain outlook was acknowledged during the latest round of ASEAN events.

It is difficult to share the optimism being expressed in the Chinese media regarding the outcome of the Bangkok Summit where the 15 (potential) RCEP partners met. Although the author of the article in question does note that the partners “plan to sign the deal next year”, and not before the end of this year as earlier estimates anticipated.

The first thing that stood out immediately was the number of partner states in attendance at the Summit: There are 15 instead of the 16 that “should be there”. One crucial participant was absent, India’s Prime Minister Narendra Modi. It should be pointed out that Prime Minister Modi had held bilateral talks with China’s Premier Li Keqiang a day earlier.

On November 5, an article was published in one of India’s leading newspapers, The Times of India, with the telling headline “China may look like the winner, but India had its reasons to walk out of RCEP”.

The first part of the headline is most likely a reference to the project’s most important “interested party” (China), because the formation of the free trade zone would significantly strengthen Beijing’s position in the Indo-Pacific in its efforts to counter Washington’s strategic plans for the region, its main geopolitical opponent.

Delhi does not share China’s goals. On the contrary, it is becoming increasingly clear that India is interested in having the United States fully involved in regional affairs, and does not wish to counter Washington’s intentions. However, India’s effective exit from the RCEP was motivated by internal rather than external factors.

Indian experts point out that Narendra Modi might have been happy to stay in this project, because opting out of it sends out a negative signal to members of other associations and alliances that India is a member of. These would include SCO and BRICS.

The Indian Prime Minister explains the true motives behind his move to opt out in the same issue of The Times of India, where he talks about the “unresolved issues” of a domestic nature that are preventing India from joining the RCEP.

The primary concern Modi is addressing here is that of the Indian agricultural industry (which is already suffering), as it is highly unlikely that it would be able to compete if the customs barriers preventing the influx of cheap and high-quality “dairy products” from New Zealand and “meat” from Australia were to be removed. The later have already gained more access to the Japanese market since the “Trans-Pacific Partnership” was introduced (in early 2019). However, Japanese industry is on a different level in terms of the level of quality it has developed (compared to India), so the Japanese are able to “respond” to the New Zealanders and Australians with something else.

Meanwhile, the level of dissatisfaction with Modi’s government and the ruling Bharatiya Janata Party is growing in the Indian villages, and this has already been felt in the results of the last elections held in two states. Even one of the government’s key allies (and to some extent the BJP’s “ideological parent”), the Shiv Sena political organization, has been sharply critical of the government’s economic policies.

However, India’s position is not the only problem preventing the formation of the RCEP. The 15 potential member states represented at the meeting in Bangkok included two equally important countries, and it might be said that their bilateral relations have long “left much to be desired.” That would be putting it very lightly.

These countries are South Korea (“the Republic of Korea”) and Japan, and the evolution (or deterioration) of their bilateral relations has been receiving attention on NEO on an ongoing basis. It is the political aspects of relations between these two countries that have stood in the way of the project to create the China–Japan–South Korea Free Trade Agreement, preventing it from being implemented for decades. The negotiation process on this proposal had been frozen for years.

After a long break, the Chinese, Japanese and South Korean foreign ministers met in Beijing on August 20-22. However, these talks ended with the vaguest of statements about their shared intentions to “continue the work”.

The summits which took place in Bangkok gave Japanese Prime Minister Shinzo Abe and South Korean President Moon Jae-in a good opportunity to discuss the problems they face in their bilateral relations. Their bilateral meeting lasted 11 minutes (Sic!) and ended the same way they always do: with an acknowledgment of the Republic of Korea’s well-known grievances with Japan, which are of a “historical nature”, countered with accusations of South Korea violating bilateral agreements from as far back as 1965, the Treaty on Basic Relations between Japan and the Republic of Korea, which (according to the Japanese side) put all of their “historical” problems behind them, consigning them to the past.

If nothing comes of the project to create a China–Japan–South Korea Free Trade Agreement, then why should the same proposed member states, South Korea and Japan, feel any differently about the larger RCEP proposal?

A cringey diplomatic “blooper” (albeit not the first to be made in recent years) was America’s participation in the series of ASEAN summits. The top official sent to Bangkok was Robert O’Brien, who replaced John Bolton as US National Security Adviser in September. US Secretary of Commerce Wilbur Ross was also in attendance. However, he only participated in the regional business forum.

The upset Robert O’Brien expressed after seven of the ten leaders of ASEAN member states staged a partial boycott of the ASEAN-U.S. summit by snubbing O’Brian therefore comes across as rather odd (although all their foreign ministers were present). In O’Brian’s opinion, this boycott was “an intentional effort to embarrass the President of the United States of America and this will be very damaging to the substance of the ASEAN-U.S. relations,”

It is the ASEAN leaders who should have been left feeling insulted, because for some reason the president of a leading world power did not feel he could make it to their most important event. Representatives at different levels have tirelessly argued that developing comprehensive relations with Southeast Asian countries is of the utmost importance.

This is true, because the same question, when you put it another way, cannot be of secondary importance for the United States: will Southeast Asian countries, which are strategically extremely important for Washington, form the RCEP (and essentially be taken “under China’s wing”)?

At least Vice President Mike Pence showed up at last year’s summit, but this year they sent a person who falls into an unclear category in the American power hierarchy.

This has undoubtedly dealt a serious blow to US diplomacy. The US President’s absence was really noticeable in Bangkok, with the Prime Ministers of such major players as China, Russia, Japan, India all in attendance.  Diplomat Robert O’Brien tried to remedy the alleged error by passing on a personal invitation from Donald Trump to all ASEAN leaders to visit the United States early next year for a “special summit”.

However, the general impression seems to be that the United States is not fit to do foreign policy whatsoever, because Donald Trump’s internal “disorder” is clearly nearing a dangerous level. Let us emphasize one thing for everyone. You can already hear the shouting matches and the sound of dishes being smashed, even outside the fence around the house known as the “USA”. Hopefully the inhabitants will not start taking firebrands from the fireplace and throwing them at each other.

Everything seemed just right in the Indo-Pacific for these countries to play happy families and build their own “Asian” house where they could all prosper, in the form of the RCEP for example.

It turns out that this household is not perfect either though, they also have their own serious problems. The same as every household in the world today.

Vladimir Terekhov, expert on the issues of the Asia-Pacific region, exclusively for the online magazine “New Eastern Outlook”.


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