Govt working to resolve Kashmir spat ahead of ‘mega’ free trade deal

India revoked the autonomous status of  Jammu and Kashmir in August despite foreign criticism. (Reuters pic)

KUALA LUMPUR: The government is working to resolve a spat with India over Prime Minister Dr Mahathir Mohamad’s stance on Kashmir, and hopes that a 16-nation trade pact, which includes India, will be signed this year despite the strained ties, International Trade and Industry Minister Darell Leiking says.

Ties took a downturn after Mahathir told the UN General Assembly late last month that India had “invaded and occupied” Kashmir, a disputed Muslim-majority region also claimed by Pakistan.

India revoked the autonomous status of its Jammu and Kashmir state on Aug 5, and has rejected foreign criticism, largely from Muslim majority countries and China, insisting it is an internal affair.

Indian traders have called for a boycott of Malaysian palm oil – which Mahathir has said amounts to a trade war – with concerns in New Delhi that negotiations on the Regional Comprehensive Economic Partnership (RCEP) could be affected too.

The spat between the world’s second biggest producer and exporter of palm oil, and its current biggest customer could most likely benefit Indonesia, the biggest producer and exporter.

Speaking to reporters today, Leiking said RCEP talks were on track and a final deal should include all the intended participants: the 10 members of Asean and six Asia-Pacific countries – China, India, Japan, South Korea, Australia and New Zealand.

A RCEP summit will be held in Bangkok on Nov 4.

Leiking said “anything can happen” before the summit, but all 16 countries were moving toward finalising the free trade agreement (FTA).

“We hope that RCEP negotiations can be concluded by year-end so that Malaysian companies can reap the opportunities from this mega FTA in opening up more market access for our products and services,” he said.

The China-led RCEP is expected to create an integrated market of 3.4 billion people with combined GDP of US$49.5 trillion, or about 39% of the world economy.

Leiking said he met with Indian Trade Minister Piyush Goyal recently and informally discussed New Delhi’s concerns on bilateral ties.

“Hope to meet him more and get more details on the issue and what they want to do,” Leiking said. “We have yet to hear (formally) from the government. But we will engage with their government more so.”

Separately, Primary Industries Minister Teresa Kok said today the government was considering sending a delegation to meet with India’s top vegetables oil trade body, which had called on members to boycott Malaysian palm oil.

“We need to see the response on the India side,” she told reporters in Parliament. “It’s good to talk and it’s good to not do harm to bilateral trade.”