Phnom Penh: Talks begin here Tuesday for a mega trade pact among 10 ASEAN countries and its six dialogue partners, including India, that enjoy considerable clout today, thanks to their 40 percent share in global output and three-billion population.
Formally called the Regional Comprehensive Economic Partnership (RCEP), negotiations are set to begin at the East Asia Summit here. It aims to lower all trade barriers across the region by the end of 2015.
Indian Prime Minister Manmohan Singh, here for the summit, will participate in the talks for the pact's launch. Commerce Minister Anand Sharma had said Sunday the ASEAN (Association of Southeast Asian Nations) economic ministers had firmed up a draft on it in August and the summit would take a view on it.
"The summit will consider the recommendations and take an appropriate view," Sharma had said. A statement, according to Indian interlocutors here, expected to issued during the summit will bring more clarity on the status on the regional trade pact.
The negotiations start even as US President Barack Obama is to convene a meeting here on a Trans-Pacific Partnership (TPP), also to tear down traditional trade barriers and streamline trade with 10 other countries.
The seeds for RCEP were sown last year during the ASEAN-Plus-Six meeting at Bali.
The grouping comprises 10 ASEAN members -- Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam -- and six dialogue partners -- Australia, China, India, Japan, South Korea and New Zealand.
Each of the six dialogue partners already have free trade pacts with Asean members. But the US and Russia, which got observer status at the East Asia Summit last year, neither have such a bilateral treaty with the grouping, nor are they involved in the RCEP.
Obama is expected to push for the TPP in his meetings Tuesday with six leaders of the TPP present here, namely the New Zealand, Australia, Malaysia, Singapore, Vietnam and Brunei. The formal talks were launched in early 2010.
New Zealand is chairing the next round of TPP talks in two weeks in Auckland. Obama took leadership of the TPP after hosting the APEC in November last year. It is the only trade deal that the US is involved in negotiating currently.
According to diplomats here, the two rival deals spring from the fact that both the US and China are keen to take leadership roles in the integration of Asia-Pacific region and on what form it should take to suits their interests.
"We're organising trade relations with countries other than China so that China starts feeling more pressure about meeting basic international standards," Obama had said at a debate with Republican rival Mitt Romney in the run up to the presidential elections.
The mega pact being negotiated between ASEAN and its six dialogue partners is being seen as another web of regional and sectoral trade talks that have sprung after the current round of multilateral talks under the World Trade Organisation failed successively.
Towards this end, China, Japan and South Korea are to hold ministerial discussions here Tuesday. "I am optimistic China, Japan and South Korea can reach a consensus to commence the three-way free trade talks," foreign ministry spokesman Qin Gang said.
According to South Korean Trade Minister Taeho Bark, if the two regional trade pacts do come into existence, they would be similar in economic size to the European Union.
According to the Organisation for Economic Cooperation and Development (OECD), which released a report here Sunday, ASEAN nations are expected to average an annual growth rate of 5.5 percent from 2013-17.