There was no mistaking India’s sense of apprehension on the eve of the Regional Comprehensive Economic Partnership (RCEP) talks — a mega trade bloc of Asean and six other countries, namely, Japan, China, Korea, India, Australia and New Zealand — that begin today. The Centre seems to have put its right foot forward by indicating that market access for goods would depend on freer visa norms for its professionals in these countries. India signed a rash of free trade pacts with the East Asian economies over the last decade, prompting the commerce minister to observe that these need to be “renegotiated” for their domestic impact. But directly renegotiating these bilaterals is easier said than done. One way is to use our strengths in services (sadly, this is confined to a large workforce at the lower end of the value chain) to secure a better deal on goods at RCEP, which may, in effect, prevail over existing bilateral FTAs. There are limits to allowing market access in the context of the Make in India programme, as is evident in the case of steel. Yet, we need to yield to get a foothold in new markets, at least to offset the potential effect of the US-promoted Trans Pacific Partnership (TPP) — a grouping of 12 countries — on our exports. The Centre fears that the TPP will impact chemicals, textiles, pharmaceuticals and plastics by shutting out market access to these countries. These areas could do with an RCEP boost.

The Centre has indicated its preference for the RCEP over the TPP, which still awaits ratification by member nations. The reasons are not far to seek. The TPP’s insistence on tough labour and environment standards, government procurement and WTO-plus provisions in the case of intellectual property will work against India’s exports. As with the EU, numerous non-tariff barriers will come into play. The RCEP (supposedly China-led) has not gone down this road as yet, although these are early days, and seven members are common to both blocs. The Doha Round principle of allowing the less developed economies some time to liberalise trade and phase out price support finds an echo in Asean, and hence in its cousin, the RCEP — but not in the TPP. In its effort to keep the Doha agenda going and perhaps buy time at the RCEP talks, India should not be perceived as obstructionist. While pushing freer movement of professionals and being circumspect about market access in some sectors, it can consider liberalising services such as law, education, entertainment and e-commerce.

Geopolitics, as well as the backdrop of global economic slowdown, cannot be ignored in the rise of mega trade blocs. World powers are scouring new markets, with their domestic economies in crisis. It is also a case of the US’ ‘pivot’ in Asia against China’s (and increasingly Russia’s) efforts to negate US influence. India should hold its own, without, however, being obdurate. It can offer a large, variegated market, but on its terms, for a slice of the Asia Pacific.

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