Negotiating team holds a string of bilaterals at Ministerial meet in Beijing
India may say no to a Regional Comprehensive Economic Partnership (RCEP) pact it is negotiating with 15 others including the 10-country ASEAN and China if it doesn’t get what it is seeking, especially in the area of services where offers have been “disappointing”, a government official has said.
The country’s negotiating team is at present holding a string of bilaterals with partner countries of the RCEP, including China, New Zealand and Australia at the on-going Ministerial meet in Beijing to negotiate on the items it will continue to protect against tariff cuts under the pact. It is also trying to convince members to improve offers in services.
“So far, we have received ambitious demands from RCEP members for tariff elimination in goods which has made our industry very uncomfortable. The government has now decided that it would agree to the RCEP pact only if all its demands are met including in services particularly in the area of work visas,” the official told BusinessLine.
Most countries in the 16-member grouping, which comprises 10 ASEAN countries, China, India, South Korea, Japan, Australia and New Zealand, are hoping to make official the tentative November-end deadline for concluding the trade and investment deal. But New Delhi, till now, has held the position that it does not want to be hurried into a bad deal.
“The bilaterals are important for India as it would try to individually convince countries on the protection it still needs to extend to certain sectors which may be different for different countries. While India may be in a position to be more generous towards the ASEAN, South Korea and Japan, with which it already has trade pacts, the same doesn’t hold true for Australia, New Zealand and most importantly China,” an official told BusinessLine. India will also drive home the message that it needs substantial offers in services, including in the area of easing of movement of workers, for the pact to succeed. “Till now offers in services, especially in Mode 4 involving movement of natural persons, has been disappointing. This is unacceptable,” the official said.
Commerce Secretary Anup Wadhawan, who is representing the country at the meet on August 2-3 in place of Commerce Minister Piyush Goyal, has meetings scheduled with representatives from China, Thailand, New Zealand, South Korea, Singapore, Australia, Japan and the 10 ASEAN ministers as a group.
Concern over tariff
A large number of Indian industry including iron and steel, dairy, marine products, electronic products, chemicals and pharmaceuticals and textiles have expressed concerns that proposed tariff elimination under RCEP would render them uncompetitive.
Indian industry is also fearful that China will dump its goods into India once the pact is signed.
A lot of work still remains to be done before the ambitious pact, covering goods, services, investments, IPR, e-commerce and government procurement, is concluded. “Till now just seven out of the total 20 chapters have been concluded. Of the pending 13 chapters, the ones on competition and dispute settlement are almost done. However, in the rest of the chapters, a considerable amount of work still needs to be done,” the official added.
The RCEP, once implemented, could be the largest free trade zone in the world as member countries account for 40 per cent of global GDP, 30 per cent of global trade, 26 per cent of global foreign direct investment flows and 45 per cent of the total population.