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South East Asian leaders to push for progress on China-backed trade pact

Southeast Asian leaders will race to get a sprawling China-backed trade pact over the line at a regional meeting in Thailand this weekend, as Beijing's bruising trade war with Washington rumbles on.

If signed, the Regional Comprehensive Economic Partnership (RCEP) will be the world's largest trade pact and is seen as a way for Beijing to cement trade ties in Asia as Washington retreats from the region.


Leaders are hoping for a breakthrough in RCEP talks at this weekend's meeting of the Association of Southeast Asian Nations (ASEAN) after seven years of negotiations over the deal, which would comprise 30 per cent of global commerce and half the world's population if signed.

"They will try to get enough together so they can sign something," even if it is not a final deal, said Juan Sebastian Cortes-Sanchez, a Singapore-based policy analyst at the Asian Trade Centre.

But members risk losing steam after dozens of rounds of negotiations and several missed deadlines to sign the pact.

Commerce ministers met Friday after an hours-long negotiation session to hammer out sticking points, as India digs in over concerns its market will be flooded with cheap made-in-China goods.

"There is one last step that every country has to find the solution to," said Thai commerce minister Jurin Laksanawisit at the start of the meeting.

Chinese premier Li Keqiang will attend the three-day summit in Bangkok -- officially kicking off Saturday amid a backdrop of heavy security -- where simmering tensions in the South China Sea will also top the agenda.

Indian prime minister Narendra Modi will also be there, as he battles fears at home that key industries like metals, textiles and dairy could be hard-hit by RCEP, which loops in 10 Southeast Asian economies along with Japan, India, New Zealand and Australia.

New Delhi's foreign ministry said Thursday "critical" issues remain to be ironed out, while Indian farmers planned nationwide protests on Monday to demand more input into the deal's terms.

- US snub -

This week's ASEAN summit comes as Washington and Beijing push for the signing of a partial agreement in a bid to roll back months of tit-for-tat tariffs on billions of dollars worth of goods that have rattled both economies.

RCEP is seen as a way for China to assert its trade dominance in Asia after the US pullout of the Trans-Pacific Partnership (TPP) in 2017, which would have been the world's biggest free trade deal.

Australia and New Zealand have called for better labour and environmental rights, without which RCEP critics fear trade standards could drop in Asia.

It could also work to further isolate the US from Asia after its pullout from the TPP, which has since been reborn as a watered-down version without Washington.

If RCEP is signed it will be "another blow to (the United States') ability to be able to engage with Asia Pacific," Cortes-Sanchez said.

In what is being read by some as a snub to this weekend's meeting, the US will send national security advisor Robert O'Brien and commerce chief Wilbur Ross.

US Vice President Mike Pence attended last year's ASEAN summit in Singapore, and President Donald Trump was at the 2017 meeting in the Philippines.

But Trump's failure to show this year is a "missed opportunity", said analyst Thitinan Pongsudhirak of Thailand's Chulalongkorn University.

"Showing up counts for everything," he said.

- Sea tensions -

Disputes over the flashpoint South China Sea will also dominate weekend talks as members attempt to inch ahead with a so-called "code of conduct" for the resource-rich waterway which Beijing claims most of.

China has long been accused of deploying warships, arming outposts and ramming fishing vessels -- stoking anger from other claimants.

Tensions have flared in recent weeks as a Chinese survey vessel toured Vietnam-claimed waters, prompting fiery demands from Hanoi for it to leave.

The incident "will be a major sticking point" for code of conduct talks, said Le Hong Hiep of ISEAS-Yusof Ishak Institute.

Analyst Lynn Kuok said despite recent tensions in the sea, code of conduct talks will grind on in the lead up to a 2021 deadline for a deal.

"It is better for parties to be talking than not at all," said Kuok, of the International Institute for Strategic Studies.

Japan's leader Shinzo Abe and president Moon Jae-in of South Korea will also be in Thailand for an East Asia summit on Monday.

Security was beefed up across Bangkok -- with 17,000 police and security officers deployed -- after multiple small bombs went off at an ASEAN meeting in August, injuring at least four in operations blamed on southern Thai insurgents.

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