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Friday, November 27, 2020

RCEP: Door still open for India, may take part in meets as ‘observer’

While India had been involved in RCEP negotiations since 2013, it walked out of the pact last year citing “significant outstanding issues” that were unresolved by the deadline to enter the agreement.

Written by Prabha Raghavan | New Delhi | Updated: November 16, 2020 7:14:36 am
Study on benefits, costs helped govt firm up RCEP standAn official said that India was not averse to trade pacts, given that negotiations for some 20 trade pacts with countries and groups of countries have been initiated by it. However, the government has objections to joining RCEP “in its current form”.

India, as an original negotiating participant of the Regional Comprehensive Economic Partnership (RCEP), has the option of joining the agreement without having to wait 18 months as stipulated for new members in the terms of the mega trade pact. RCEP signatory states said they plan to commence negotiations with India once it submits a request of its intention to join the pact “in writing”, and it may participate in meetings as an observer prior to its accession.

While India had been involved in RCEP negotiations since 2013, it walked out of the pact last year citing “significant outstanding issues” that were unresolved by the deadline to enter the agreement.

Key issues for India were related to safeguarding the country against China, another RCEP member. Concerns included “inadequate” protection against surges in imports — a major concern for India, as its industry had fears that signing RCEP would allow cheaper products from China to “flood” the market here. India had been seeking an auto-trigger mechanism through which it could raise tariffs on products in instances where imports crossed a certain threshold to counter this.

India had also sought more market access and raised issues over non-tariff barriers by nations like China that would prevent it from growing exports. Its demands that 2014 be used as the base year to reduce tariffs on the products traded as part of the pact were also not met — using a base year before then would mean a drastic drop in the import duties on these products for India.

Other concerns included a “possible circumvention” of rules of origin — the criteria used to determine the national source of a product — which India felt had not been addressed at the time it walked out of the deal on November 4, 2019. For India, there were no adequate provisions in the deal to prevent countries from routing, through other countries, products on which it would maintain higher tariffs.

Prime Minister Narendra Modi had last year said India had “long” pushed greater movement of labour and services in return for opening up its own market and was also seeking to address “unsustainable” trade deficits.

At the time that India had walked out, various civil society bodies and local trade associations representing industries like dairy, textile and agriculture had expressed strong opposition to RCEP, arguing that they would face stiff competition at the hands of cheaper alternatives from other participant countries.

In addition to this, there was also opposition from the Left parties, members of the United Progressive Alliance that had first started the negotiations and RSS’ Swadeshi Jagran Manch.

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