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India will face pressure from its partners to seal a separate deal in goods — leaving out services — as the next round of negotiations for a regional comprehensive economic partnership (RCEP) pact begins in New Delhi on Monday,
Separating services could take away India’s bargaining chip and prevent it from working out a good deal for its professionals, the Government fears. The RCEP, which will create the largest trading bloc in the world, includes India, the 10 Asean countries, Japan, South Korea, China, New Zealand and Australia. Together, they account for 45 per cent of the world population, and a quarter of global GDP, at $21.4 trillion.
“Almost all the partners want fast-tracking of an agreement in goods while pushing services to the backburner, but we are determined not to agree,” a Government official told BusinessLine .
Members are hoping to finalise the first set of offers (concessions) in the sixth round of talks in New Delhi, from December 1 to December 5. The negotiations are scheduled to be wrapped up by the end of next year.
Giving initial offers, supposed to be uniform for all members, is also proving to be a problem, as India is not comfortable with giving concessions to China.
“Several sectors have urged us to be cautious while offering concessions to China as they face intense competition from the country,” the official said.
Giving concessions to New Zealand and Australia similar to those offered to other partners is also not easy. “Except for China, New Zealand and Australia, we have free trade pacts with all RCEP members, which is turning out to be a problem,” he said.
This is because all FTA partner countries expect India to give initial offers equal to or over and above what exists in those pacts. It is difficult to give such liberal offers to countries that India does not have an FTA with.
New Delhi is adamant about not agreeing to separate agreements on goods and services because it has had a bitter experience with Asean. Since India agreed to sign a free trade agreement in goods early, it had nothing left to bargain with when it was negotiating on services.
As a result, it got almost nothing in the area of services, which happens to be of primary interest to the country.
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