It’s crunch time for India: integration into or isolation from APEC?

By Xie Chao Source:Global Times Published: 2014-11-16 17:38:01

The recently concluded 2014 Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting did not see the presence of India. India declined the invitation, stating that it is not an APEC member.

Needless to say, the invitation itself was unprecedented after Chinese President Xi Jinping extended it personally to Indian Prime Minister Narendra Modi during their first meeting in Brazil on the sidelines of the sixth BRICS summit this July.

China used its position as host to invite non-members, including India, Pakistan and Mongolia. Modi's absence was particularly notable after the leaders of Pakistan and Mongolia arrived in Beijing for the meeting.

Some analysts are citing domestic constraints as the reason preventing Modi's attendance. However, this does not sufficiently explain India's motives. 

India is not an APEC member and thus attending the meeting does not bind it to any formal obligations, especially so when considering that APEC is not a binding forum.

Compared with APEC, the World Trade Organization (WTO) puts more binding institutions on its members and India has used its WTO membership to drive its initiatives and protect its core interests.

A recent example is that in early November, India blocked the WTO Trade Facilitation Agreement to preserve its domestic farm subsidy system.

India refuses to scale back this purchase scheme, which it mobilizes to buy wheat and rice to distribute to 850 million people. Neglecting or hurting their interests means committing political suicide for any party or leader.

New Delhi's blockade has proved that it can better guard against its interests when it's in, rather than out of, an organization.

India's refusal to attend the APEC meeting confuses observers on two further fronts. First, APEC is a not-to-be-missed opportunity for the Modi government to garner support among APEC members and display Modi's resolve in building up a new image of India for stronger economic integration into the world trade system.

Second, India has been pursuing APEC membership for two decades. India has secured vocal support from the US, Japan and Australia. China's support can significantly amplify its chances and expedite the process.

India was invited to be an observer to APEC for the first time in November 2011. With a stronger economy, India now stands as a strong candidate for entry into APEC. However, its recent moves regarding WTO negotiations and declining this APEC meeting invitation present us with an India in contradiction.

An India with stronger confidence and closer integration into the regional economy will benefit all sides.

China has realized this and as some observers have pointed out, the invitation itself is an implicit Chinese endorsement of membership.

So now comes India's choice: to integrate with or isolate itself from APEC?

The greatest strength of APEC lies in being a mature regional economic forum bringing the North and South countries together to promote multinational trade and investment facilitation agendas.

APEC has developed into one of the largest regional forums in terms of population and global trade as well as real GDP in purchasing power parity terms.

Hence, India's economic reform and development could certainly benefit from APEC institutions for broader contact with other Asia-Pacific countries. Its relatively isolated economy can find better ways to integrate into world trade systems.

The official APEC theme for the November meeting was "Shaping the Future through Asia-Pacific Partnership." The world has recognized its importance and is awaiting the Indian response for this call of partnership.

The author is a PhD candidate at the Department of International Relations, Tsinghua University. opinion@globaltimes.com.cn



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