SINGAPORE – Leaders from 16 Asia-Pacific nations, including Japan, China and India, have said they will now seek a free trade agreement next year, missing a year-end deadline amid disagreements over tariffs and other politically sensitive issues.
The delay underscores the difficulty posed by the diversity of the negotiating members in creating what would be one of the world’s largest free trade zones, amid the rise of protectionism and tit-for-tat exchanges of higher tariffs between the United States and China.
The leaders noted that “substantial progress” was made this year, citing that seven out of 18 chapters of the draft Regional Comprehensive Economic Partnership (RCEP) were concluded. “We are determined to conclude a modern, comprehensive, high quality, and mutually beneficial RCEP in 2019,” the leaders said in a joint statement issued Wednesday after the meeting, which was chaired by Singapore.
Ahead of the summit, trade ministers failed to agree on key elements in the deal. Progress was hampered by India’s resistance to tariff cuts based on fears of cheaper imports flooding in, and demand from Japan and Australia for high-standard electronic commerce rules, negotiation sources said.
Set to cover a third of the global economy, RCEP has a history of missed deadlines due to varying degrees of ambition among the members — which include the Association of Southeast Asian Nations. Talks began in 2013, and the initial goal was to wrap them up in 2015.
While U.S. President Donald Trump favors bilateral deals to fix imbalanced trade, Japan has been seeking unity among countries that are promoting free trade through multiparty frameworks. RCEP does not include the United States. The Asia-Pacific region will see a revised Trans-Pacific Partnership trade accord by the end of 2018, following an abrupt U.S. withdrawal from the original agreement in 2017. The 10 ASEAN countries are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, the Philippines, Thailand and Vietnam.