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India is expecting a positive outcome from the upcoming round of negotiations on the proposed Regional Comprehensive Economic Partnership (RCEP), scheduled to take place in the Myanmarese capital of Nay Pyi Taw early next month.
Prior to that, trade ministers from all member countries would be meeting in Malaysia on Monday, for an inter-ministerial discussion. Commerce & Industry Minister Nirmala Sitharaman is also expected to attend the meeting where India is going to spell out its stance explicitly, a senior commerce department official told Business Standard.
Incidentally, India is facing stiff opposition from its domestic industry in negotiating the RCEP as it entails giving tariff concessions to China and other rival countries. The steel industry is especially up in arms and the minister is expected to discuss the matter during the meeting in Malaysia. The last round of talks took place in Japan in June. But the talks were kept in complete secrecy by all the countries.
According to the official, although the talks are "progressing successfully" it will insist on the trade pact to be divided into goods and services, separately with different set of tariff mechanism.
India, on its part, is keeping the talks under wraps as negotiating RCEP means discussing a tariff concession deal with China. Many representatives of the Indian industry have expressed their "uneasiness" in negotiating the deal as it means "opening the floodgates" to them, an industry chamber representative said on condition of anonymity.
During the upcoming talk, India is also expected to demand a differential duty concept, meaning different duty structure for different countries on imported goods. India is planning to also, insist upon excluding the 'ratcheting-up process' of the pact. In order words, consolidating the trade agreements by following the best practices among member countries.
However, China and India are hell-bent on concluding the deal at the earliest as the US-led Trans-Pacific Partnership (TPP) gathers momentum. The TPP, once implemented, will establish stringent exporting standards and rules of origin undermining all other bilateral trade pacts. India is especially concerned because it is not part of it. As a result, the RCEP will come as a reply to the TPP for India where exporting standards are severely poor and the concept of rules of origin is still at a nascent stage.
"The failure of the TPP to recognise development challenges will persist as a problem for countries outside of the TPP. It offers a binary choice - countries either meet the high standards of TPP or they do not. In contrast, the RCEP explicitly tackles capacity-building and has the scope for phased adjustment, recognising the significant diversity of the stages of development within ASEAN and across its partners," said David Nellor, adjunct professor, Lee Kuan Yew School of Public Policy, National University of Singapore in his report. He was a consultant to the Indonesian minister of trade in preparing the RCEP.
Apparently, it is learnt that countries like Japan and South Korea are pressing for stiff intellectual property laws that might stifle the pharmaceutical industry and access to affordable medicine.
On the other hand, some of the members such as the Philippines and Vietnam have called for regulating the e-commerce sector.
RCEP, launched in November 2012, comprises 10 economies of the ASEAN (Association of Southeast Asian Nations) region - Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam - and six of its free trade partners - Australia, China, India, Japan, New Zealand and South Korea.
So far, eight rounds of talks have taken place with not a single positive outcome on any of the segments like agriculture, industrial goods, services and investments.
