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Press Release : RCEP Asia’s mega-regional FTA means mega impact for people in India and the region

Press Release | 20 April 2016 | New Delhi

RCEP : Asia’s mega-regional FTA means mega impacts for people in India and the region

As the 12th round of trade negotiations for the RCEP commence in Perth (Australia) from 22 April onwards, several civil society organisations in India have raised concerns around transparency and possible negative impacts on several issues ranging from access to medicines, tax policy, investor rights and farmers access to seeds.

The Regional Comprehensive Economic Partnership (RCEP) has been under negotiation since 2012 between sixteen governments in the Asia and Pacific region - the ten ASEAN countries plus Australia, China, Japan, Korea, New Zealand and India.

The RCEP once concluded will be the world’s largest trading bloc, with its own set of rules on a broad spectrum of issues such as trade in goods, agriculture, services, investment, competition, intellectual property and other areas of economic and technical cooperation. Thus the extent of its coverage both in terms of the range of substantive issues and the number of people’s whose lives and livelihoods it impacts is unprecedented. This mega free trade agreement (FTA) is expected to be concluded later this year.

A major cause of concern for civil society across the region has been the lack of public disclosure on what exactly is on the agenda for Round 12. Speakers at the press conference emphasized that it was critical that all participating member countries do a full disclosure of their positions and relevant documents are shared with affected constituencies. Further, negotiators should brief civil society and not just industry groups prior to and after the talks. There is a long-standing demand for transparency in treaty negotiations. In Europe too, the Dutch people are mobilising for a referendum on another controversial FTA – the TTIP, between EU & US.

In India there are several progressive decisions given by the Central Information Commission (CIC) that require making public the relevant documents before any policy is finalised.

India has shown the way in terms of the production and availability of high quality, safe and effective drugs at affordable prices and is therefore often called the pharmacy of the world. This is because India has tuned its patent law to facilitate this.

Senior Advocate and Former UN Special Rapporteur on the Right to Health Anand Grover from the Lawyers Collective said that the flexibilities employed in Indian Patent Law – Section 3(d), compulsory Licenses etc. are sought to be done away with by TRIPS+ provisions in the RCEP. ‘Doing so will make drugs unavailable and affordable to not just the poorest of patients but also to middle and upper middle class patients, not only in India but also other developed and developing nations. India must stand firm to ensure RCEP provisions do not agree to TRIPS+ and/or TPP provisions’, he added.

Another controversial issue is whether the secretive investor to state dispute settlement (ISDS) mechanism is still on the RCEP table. Research shows that corporations are regularly using ISDS courts to avoid paying their legitimate taxes. Corporations have sued countries ranging from India to Romania in over 40 tax-related disputes and, in some instances, have successfully challenged and lowered their tax bills.

V Lakshmi, Regional Secretary for Asia and Pacific of the Global Trade Union Public Services International (PSI) stated corporate tax evasion is now a serious public concern, worldwide. Tax breaks cost developing countries as much as $138bn a year, money that is much needed for healthcare and other critical public services. As an instance, Vodafone launched an arbitration claim against India that is still ongoing, after the former was ordered to pay tax on an $11bn deal when it acquired a controlling interest in Hutch-Essar an Indian phone company. Vodafone had paid no capital gains tax on the 2007 deal through its use of offshore companies. This is not an isolated case and trade deals will make it a systemic issue. The fact that multinational companies would be able to challenge and undermine fair tax systems under RCEP is testament to the terrifying extent of the corporate grab embedded in this toxic trade deal, Lakshmi concluded.

Thus far the Government of India is holding strong against demands from developed countries, such as Japan and Korea, which want higher levels of IP protection in line with UPOV 1991. This would mean going against India’s domestic legislation – Protection of Plant Varieties and Farmers’ Rights Act, 2001, that expressly provides for farmers’ freedoms over their own seeds. The key concerns of small farmers and seed savers are the availability of their own seeds and the continuance of their seed freedoms. Since, most of them are women, this also has a gender implication, whereby their knowledge about locally adaptive varieties that is even more relevant with the climate crisis and frequent droughts, is further marginalised.

‘Biopiracy’ of local know-how and bioresources has and continues to be matter of concern for India ; for that reason it is insisting on other trading partners in RCEP to provide adequately for traditional knowledge protection. All the RCEP countries are also member of the multilateral environmental agreement – Convention on Biological Diversity (CBD) that requires them to do so. Other countries such as Indonesia, Malaysia and Thailand ought to likewise join hands on this issue.

The Government of India itself is wary of the overall gains to the Indian economy from the RCEP. As trade officials themselves remark, there are no friends in this group. In fact, Malaysia and Singapore are driving the rest of the ASEAN countries. And there are few gains to be got from China side.

If the RCEP is meant to be Asia’s counter to the other FTAs such as the TPP – Trans-Pacific Partnership Agreement, then it must be truly responsive to Asia’s realities. We believe that India can stay strong and re-think its strategy for RCEP, while staying away from TPP-like agreements. The Government of India must not give into any pressures, whether for tariff reduction or on any other front. Any attempts to isolate India, as in the WTO, to simply push for more trade will have grave consequences for sustainable futures of peoples not only in India, but also in the region.

Issued by the Forum Against FTAs

For further information please contact :
Shalini Bhutani : (Tel : 98104 33076)
Benny Kuruvilla : (Tel : 98739 21191)

 source: Forum Against FTAs