Domestic industry is unsure of benefits of deal, govt tells RCEP nations

India has told the Association of Southeast Asian Nations (Asean) bloc of member countries that the domestic industry is unsure of the benefits of the Regional Comprehensive Economic Partnership (RCEP) deal, currently being negotiated.
 
In its most direct statement on the matter ever since talks began, India on Tuesday told Asean nations that the domestic industry is not convinced that the proposed RCEP deal will create a ‘win-win situation for all’ by ensuring balanced outcomes for both goods and services.
 
This was communicated by Commerce and Industry Minister Piyush Goyal at a meeting with his counterparts from Thailand Chutima Bunyapraphasara, Indonesian trade minister Enggartiasto Lukita, and Asean Secretary General Lim Jock Hoi.

 

Arguing that ‘apprehension and pessimism’ about the impact of the earlier free trade agreements (FTAs) persist in the industry, Goyal said India has made asymmetrical sacrifice in goods, offering much more than it has received on the RCEP deal, yet. The promise of commensurate offers in services subsequently by Asean countries did not fructify, he added.
 
The RCEP is a proposed pact between 10 Asean economies and six others (New Zealand, Australia, China, India, Japan, and South Korea) with which the grouping currently has FTAs. So far, 26 rounds of talks have concluded, apart from six minister-level meets.

 
“The surge in goods imports into India is accentuated by instances of non-adherence to the rules of origin provisions and lack of full cooperation in investigating and addressing such breaches. The utilisation of preferential tariffs by India under the India-Asean FTA is below 30 per cent because of standards, regulatory measures, and other non-tariff barriers in the region,” the commerce department said on Tuesday.
 
Goyal also stressed that it has been difficult to get China to allow market access for Indian goods. A report on the RCEP, commissioned by the Confederation of Indian Industry and submitted to the government, has recommended that products — the trade of which is dominated by China — should not be included for tariff reductions under RCEP. Products on which anti-dumping duties are levied have also been recommended for exclusion.

 
India has resisted calls by most nations, arguing New Delhi should slash existing tariffs on up to 90 per cent of all goods, as well as demands by developed economies such as Japan and Australia to open up the Indian market to specific products such as dairy and engineering goods. Against that backdrop, the future of the mega trade bloc, under planning since 2012, is uncertain; more so, as several ministries have been opposed to the talks.
 
While the Ministry of External Affairs is reportedly on board, others, including steel, agriculture, and chemicals are in favour of India leaving the deal.

The commerce and industry minister emphasised the adherence to the RCEP guiding principles to balance high ambition on goods’ tariff reduction with addressing the sensitives in bilateral pairings like India–China through temporary and permanent deviations/exclusions becomes important.
 
India has told other negotiating nations that services negotiations must also target commensurate levels of ambition, with offers covering most sub-sectors of interest in all modes in a binding manner.
 
The next round of talks is slated to begin in China on July 22.

            Sticking point

• The RCEP is a proposed pact between 10 Asean economies and six others (New Zealand, Australia, China, India, Japan, and South Korea) with which the grouping currently has FTAs
• So far, 26 rounds of talks have concluded, apart from six minister-level meetings
• Arguing that ‘apprehension and pessimism’ about the impact of the earlier FTAs persist in the industry,  Commerce and Industry Minister Piyush Goyal said India has made asymmetrical sacrifice in goods, offering much more than it has received on the RCEP deal, yet
• India has told other negotiating nations that services negotiations must also target commensurate levels of ambition