China Pushing Regional Comprehensive Economic Partnership to Make up for Being Left out of Trans-Pacific Partnership

Left outside the U.S.-backed Trans-Pacific Partnership (TPP) trade pact struck last week, China and India approach this week's talks for a huge Asia-wide equivalent with fresh urgency, lest competitor nations steal a march on export access.

Beijing is a key driver of the Regional Comprehensive Economic Partnership (RCEP), a proposed 16-nation free-trade area that would be the world's biggest such bloc, encompassing 3.4 billion people.

"Member countries will be under pressure to fast-track negotiations for RCEP," said a senior official in India, which is keen to avoid being excluded from major trade accords.

While China's rivalries with India and Japan will complicate progress, it has incentive to get things moving.

China's central bank estimates the world's second-largest economy could forfeit a 2.2 percent boost to gross domestic product if Beijing does not join the TPP, according to a commentary by the bank's chief economist, Ma Jun, published in the official Shanghai Securities News on Friday.

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Why are America's new Trade Deals Collapsing?

Chinese President Xi Jinping will be in Washington this week on an official state visit. President Obama had hoped to impress Xi with an all but sealed trade deal with major Pacific nations called the Trans-Pacific Partnership (TPP) to demonstrate that America is still a force to be reckoned with in China's backyard.

But Obama's trade policy is in tatters. The grand design, created by Obama's old friend and former Wall Street deal-maker, trade chief Mike Froman, comes in two parts: a grand bargain with Pacific nations aimed at building a U.S.-led trading bloc to contain the influence of China, and an Atlantic agreement to cement economic relations with the European Union.

Both are on the verge of collapse from their own contradictory goals and incoherent logic.

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