Scott Morrison urges patience on regional trade deal

Prime Minister Scott Morrison has urged patience in the pursuit of a regional trade deal that could cover 3.6 billion people, using a regional summit to highlight the strategic gains to Australia if the agreement can include both India and China.

Mr Morrison played down concerns about Indian objections to the sweeping deal on Monday and insisted Australia wanted the outcome to shore up regional security as well as trade.

Scott Morrison with Chinese Premier Li Keqiang ahead of the ASEAN Summit in Bangkok.Credit: AAP

The Prime Minister made the remarks after a meeting with Chinese Premier Li Keqiang, which triggered a positive statement from China after sharp differences on trade, human rights and political interference.

While a final outcome on the trade deal remains in doubt, leaders emerged from the East Asia Summit in Bangkok on Monday to talk up the chances of sealing the agreement between 16 nations early next year.

"There is a bigger benefit to Australia in the broader integration of the Indo-Pacific," Mr Morrison said.

"The integration of the economies of the Indo-Pacific is incredibly important for the prosperity of the region, but also its security – of which Australia is also a beneficiary."

The Department of Foreign Affairs and Trade estimates the Regional Comprehensive Economic Partnership would cover 16 nations with a combined economic output of $US27 trillion ($39 trillion) a year and trade with Australia worth $522 billion a year.

The Morrison government sees the deal as a way to ease differences between regional powers such as China and India at a time when United States President Donald Trump has rejected a major regional trade deal and is fighting a trade war with China.

"This RCEP agreement encapsulates, if you like, the economic dimension of this Indo-Pacific concept that we have been pursuing now for many years," Mr Morrison said.

The Prime Minister said the closer regional ties should include "freedom of movement, freedom of navigation [and] freedom of overflight", and could take time.

"That's why we need to be patient about it," he said.

"And so I wouldn't describe it at all in terms of carve-outs. I'd actually talk about it in the inverse of that – with a very wide-open door."

Mr Morrison met Indian Prime Minister Narendra Modi on Monday afternoon and is preparing for a visit to India in January, while also visiting Japan in the same month.

Foreign Minister Marise Payne held a "quadrilateral" meeting with her counterparts from India, Japan and the US in New York in September, in a loose alliance that has triggered Chinese fears of "containment" by other countries.

While Australia would prefer to conclude the RCEP with India included, its analysis of the deal suggests it would be worthwhile pursuing if India did not sign.

The Australian analysis shows the full RCEP agreement with all 16 members would cover 61 per cent of Australia's two-way trade, but that it would still cover 58 per cent if India stayed out.

Indian companies fear a flood of Chinese imports under the RCEP. While Mr Modi has backed the deal in principle, a final outcome depends on an agreement next year.

Mr Morrison held talks in Bangkok with Malaysian Prime Minister Mahathir Mohamad, Singaporean Prime Minister Lee Hsien Loong, Indonesian President Joko Widodo and Thai Prime Minister Prayut Chan-o-cha.

The meeting with Mr Li was followed by a statement from Chinese officials emphasising the need to return to the "normal track of long-term health and stability" in the relationship with Australia.

Mr Morrison said Australia's differences with China did not prevent a good relationship.

"We are a liberal democracy. They are a Communist Party state. We are not seeking to adopt their system and they are not seeking to adopt ours, and so there is an honesty about understanding the differences between those two outlooks," he said.