RCEP: Tough-talking Delhi says free services if you want deals on goods

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The Hindu | 9 February 2016

RCEP: Tough-talking Delhi says free services if you want deals on goods

by Amiti Sen

Hardening its stand on the services issue, India has decided to inform member countries of the Regional Comprehensive Economic Partnership that it is not interested in negotiating any further on goods till there is progress in the area of liberalising movement of professionals.

The next round of negotiations on the RCEP, a grouping that comprises 16 countries — the 10-member ASEAN, and India, China, South Korea, Japan, Australia and New Zealand — will take place in Brunei next week.

“We want to make our next offers in goods only after there is more progress in services. At Brunei, we will also try to build an alliance of like-minded countries to give weight to our demand. We hope South Korea and Japan and some ASEAN members support us,” a government official told BusinessLine.

New Delhi’s tough stance follows the disappointment with ASEAN, with which it had agreed to a deal in goods before finalising a pact in services. India got a disappointing deal in services as it had lost its bargaining chip.

The official said that almost no country has offered anything worthwhile in Mode 4 of services (movement of workers) in the first round of offers exchanged between the members. “On the other hand, most members are aggressive in goods, and intensive discussions on give and take are happening in the area. We have to insist on a balance at Brunei,” he added.

It is imperative for India to ensure that the RCEP negotiations are successful or it will lose preferential access to a number of markets in the region with the US and 11 Pacific Rim countries including Canada, Japan, South Korea, Chile, Australia, New Zealand, Peru, Vietnam, Malaysia, Brunei and Singapore finalising the Trans Pacific Partnership pact that could create the world’s largest free trade zone. The RCEP, accounting for 45 per cent of the world population and a GDP of over $21 trillion, can match the TPP in size and scale.

Second paper

New Delhi is working on a second paper on freer movement of contractual services suppliers (CSS) and independent professionals, which it hopes to circulate for discussion in Brunei. “We had circulated our first paper on Mode 4 in October last year, insisting that both goods and services negotiations needed to be concluded simultaneously at the RCEP. But we still find progress only in goods, with services largely ignored,” the official said.

On the goods front, some members, including China, South Korea, Japan and some ASEAN countries, have already started submitting requests for further opening of markets to individual members, in response to the first round of offers given by all.

For instance, India and China agreed to eliminate tariffs on 42.5 per cent of items traded between them. India proposed the same for Australia and New Zealand, which were ready to reduce tariffs on 62.5 per cent and 80 per cent of items from India, respectively.

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source: The Hindu