Comments
The Commerce Ministry is under pressure to expedite a political decision on the market openings offer to members of the proposed regional comprehensive economic partnership (RCEP), particularly China, the country largely responsible for India’s indecisiveness.
In last week’s negotiating round in Kobe, Japan, there was a broad agreement between the 16 participating countries that efforts would be made to submit revised and concrete offers in May, when members meet for the next round of negotiations in the Philippines, and to try and wrap up the negotiations before the end of this year, a government official told BusinessLine .
“There was considerable progress made in last week’s talks. There is a sense of urgency amongst members to wrap up the negotiations after the failure of the Trans Pacific Partnership. We have to get a political nod very soon on improved offers so that we have something substantial to submit in May,” the official said.
The RCEP, which includes the 10-member ASEAN countries, India, China, Japan, Australia and New Zealand, is aiming for free trade in goods and services and freer flow of investments between members. Once concluded, it could be the largest free trading bloc in the world accounting for 45 per cent of the world population and over $22 trillion of gross domestic product (about 30 per cent of world GDP).
New Delhi has also been stressing that matching offers by all members need to be made in the area of services, especially mode 4 which relates to freer movement of professionals.
There is no clarity yet on whether a Cabinet nod would be required for extending the final offers. “We don’t know yet what kind of clearance we would need. But we certainly can’t make our final offers till a political decision is taken by the higher powers,” the official said indicating the Prime Minister’s Office.
India’s main problem is that the members have rejected its initial offer under a three-tiered system where it extended the ASEAN the maximum tariff elimination on 80 per cent items, followed by elimination on 62.5 per cent of items for Japan and South Korea (countries with which bilateral free trade pacts exists) and elimination on 42.5 per cent items for China, Australia and New Zealand (where no free trade such pacts exist).
Not only will New Delhi now have to give a single structure of tariff cuts for all countries, with only some deviations allowed to take care of its sensitivities, it also has been asked to improve its offers, the official said.
“It was difficult enough for us to give an offer of eliminating 42.5 per cent of tariffs for China, despite the fact that it will happen over an extended period of time. To improve upon that will be a very difficult political call,” the official said.
New Delhi hopes to protect its most sensitive items such as steel from immediate tariff cuts using the deviations allowed.
Now that the US has pulled out of the ambitious TPP — of which seven members from RCEP were also a part — participating countries are viewing the RCEP as their last recourse to a large regional pact.
“While the failure of the TPP has made India less vulnerable in the discussions on IPR and investments where the TPP provisions were being treated as the gold standard, definitely the pressure in the area of goods has gone up several-fold,” the official said.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.