Asia-Pacific nations in the Regional Comprehensive Economic Partnership finally reached an accord this week on a text acceptable to all parties -- save for India. The South Asian country's opposition to such large-scale trade liberalization forced leaders to give up on sealing a deal this year.
New Delhi has signaled that it may withdraw from the talks altogether, which would result in a deal that fails to deliver on its initial promise. As the 15 remaining members hash out the final details with an eye toward a 2020 signing, they should keep working to bring India back on board for a complete 16-member RCEP.
The regional pact would create a free trade bloc covering half the world's population and around 30% of its gross domestic product. The economic benefits would extend beyond the participants to the global economy as a whole.
As currently negotiated, the RCEP would not go as far in opening up trade as the 11-member Trans-Pacific Partnership that entered into force late last year. But it still offers an additional bulwark against the wave of trade protectionism spreading from the U.S. It should also encourage reform of China's unusual system of state capitalism.
Negotiations on the RCEP began in 2013 but were stymied by disagreements over tariffs, and the target date for signing the pact was repeatedly pushed back. The participants should be sure to conclude the agreement this time around and put it into effect as soon as possible.
The problem now is India, which worries about the pact eroding domestic industry and widening its trade deficit. The ruling Bharatiya Janata Party's lackluster showing in recent state legislative elections has also given Prime Minister Narendra Modi's government less leeway to cede ground.
Some argue that the other RCEP members should hurry and reach an agreement now, even without India, while China is still willing to cooperate in order to ease the economic pressure from its trade war with the U.S. But the pact may be less significant and less effective without New Delhi.
India combines democratic values with enormous economic growth potential. Keeping it involved in RCEP will be significant not only in the initial implementation of the pact, but also for expanding and deepening it later on. India itself should also benefit in the long run through even stronger economic growth.
India is an important strategic partner for Japan in particular as Tokyo promotes its vision of a free and open Indo-Pacific region. Japan has opposed an India-less RCEP. Tokyo should leverage its experience with the TPP and its economic partnership agreement with the European Union to help all parties involved reach a compromise.
