RCEP: Pressure mounts on India for partial conclusion of pace by year-end

The Hindu BusinessLine, India

RCEP: Pressure mounts on India for partial conclusion of pace by year-end

11 October 2018

By Amiti Sen

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New Delhi opposes move, says many issues in goods and services need to be sorted out

(New Delhi) Prime Minister Narendra Modi is likely to be under pressure to agree to a year-end partial conclusion of the Regional Comprehensive Economic Partnership (RCEP) pact that India is negotiating with 15 countries, including China, when he attends the regional summit next month in Singapore.

At the recently concluded special Trade Negotiations Committee meet in Jakarta attended by officials from member-countries, the 10-member ASEAN and most other members, including China, stressed on a year-end package deal despite India’s protests that many issues in goods and services need to be sorted out first, an official source told BusinessLine.

Other members of the RCEP include Japan, South Korea, Australia and New Zealand. Once concluded, the RCEP is likely to result in the largest free trade bloc in the world covering about 3.5 billion people and 30 per cent of the world’s Gross Domestic Product.

The package of deliverables, tentatively agreed to by Trade Ministers in their last meeting in August in Singapore, comprises four components — markets for goods, services, investment and intellectual property rights.

In a joint statement released after the Ministerial meeting, the Ministers “expressed the hope that completion of the package would signify the substantial conclusion of the RCEP negotiations this year.”

India, however, had opposed the language of the statement, as it does not want a conclusion of any part of the negotiations this year, another official familiar with the happenings said. It is of the view that there are many issues that are yet to be resolved, including the extent of commitments India would take in opening up its goods market, especially for China, and what it would get from other members in terms of increase in mobility of professionals.

“There is an apprehension that if a package is agreed to in just two months’ time, India would be pushed into taking up commitments it might not be comfortable with and may not get anything worthwhile in services,” the official said.

Giving substantial concessions to members, especially China, (Beijing is apparently seeking zero-tariffs on more than 80 per cent traded items) could lead to protests from a large section of the Indian industry which fears competition from cheap imports and this might also lead to political fallout with the general elections scheduled in 2019.

The next RCEP Ministerial meet, scheduled on October 13, is crucial as most members would try to push the proposal for the conclusion of package of deliverables further.

“If there aren’t sharp interventions by the Indian delegation at this point of time, there would be attempts to include the package in the official declaration of the RCEP Summit in Singapore next month to be attended by heads of states. Prime Minister Modi could find himself in a difficult spot if the situation is not handled carefully by New Delhi before the summit,” the official said.

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