TOKYO -- After failing to meet an earlier target to sign a deal by November 2018, the 16 member nations of the Regional Comprehensive Economic Partnership will meet as early as next month with a new goal of reaching an agreement on the pan-Asian trade accord this fall.
Whether that becomes a reality hinges on India, negotiators say. With national elections to be held by May, leaders of the South Asian nation are hesitant to eliminate tariffs which may lead to an influx of Chinese goods, causing its trade deficit to balloon.
According to sources, India mentioned the elections in negotiations last year and asked for the understanding of other RCEP members. Because of these circumstances, RCEP members aim to enter final negotiations in the summer or later, after India's elections.
RCEP encompasses China, Japan, South Korea, India, Australia, New Zealand and the 10 members of the Association of Southeast Asian Nations. Negotiations for the trade deal began in 2013. If realized, RCEP would cover half the world's population and about 30% of global trade. Notably, it would include China and India, which are not part of the 11-nation Trans-Pacific Partnership trade pact.
Negotiations have not gone smoothly, however, with agreements reached in just seven of 18 fields. A wide gap remains between nations seeking substantial free trade, including Australia and Japan, and those cautious about opening markets rapidly, such as China and India. At a ministerial meeting last November, the parties were unable to agree on tariffs in key fields.
Hoping to reboot the process, the member nations are looking to have negotiators meet as early as next month and hold a ministerial meeting in Asia this spring. The goal is to reach a final agreement at another ministerial meeting and a gathering of leaders in the fall.
Progress has been made in some areas. For example, Japan and China are close to an agreement on tariffs, according to sources. About 90% of products are expected to be tariff free. Although this figure is lower than what is laid out in the TPP-11 deal or Japan's economic partnership agreement with the European Union, many members argue that forming a comprehensive trade pact that includes China and India should be the top priority.
"There is room for Japan and others to compromise in such fields as rules, in order to get India and China on board," said a Japanese government official.