Economy

India convinces RCEP members to commit on easing worker movement

Our Bureau New Delhi | Updated on September 04, 2018 Published on September 04, 2018

In a significant breakthrough in the ongoing negotiations of the Regional Comprehensive Economic Partnership (RCEP), India has convinced the 15 partner countries, including the 10-member ASEAN, to agree to binding commitments in the area of easing movement of workers and professionals in the region.

India, however, agreed to take on commitments to reduce or eliminate tariffs on a larger number of goods than what it had earlier proposed. This, however, is subject to the condition that it is given the flexibility to get around its sensitivities (by taking on less onerous commitments to be implemented over a longer period) with countries with which it does not have bilateral free trade pacts, including China, Australia and New Zealand.

“We have said that the RCEP is not a goods partnership alone. It is an economic partnership...(that) envisages that services should be an integral part of trade,” Commerce Minister Suresh Prabhu told a media gathering here on Tuesday.

Once concluded, the RCEP is likely to result in the largest free trade bloc in the world covering about 3.5 billion people and 30 per cent of the world’s GDP.

Last week, Prabhu attended a Trade Ministers’ meeting of RCEP countries in Bangkok, where a number of crucial decisions were taken.

He said that while there will be substantial negotiations in the next couple of months, the talks will not conclude in 2018 but continue in 2019.

The 16 Trade Ministers, however, agreed on reaching a package of deliverables by the end of 2018 which could have a number of elements including goods, services and rules of origin.

“There is no agreement yet on what the package of deliverables will include but there is an overwhelming feeling amongst RCEP members that there should be some sort of an agreement by the RCEP Summit in November in areas where there has been a progress in negotiations,” an official told BusinessLine.

In services, so far, RCEP members have not agreed to taking on binding agreements on Mode 4, which includes rules guiding movement of natural persons or workers. There was, especially, major reluctance from small countries such as Singapore, New Zealand and Brunei. However, with India sticking to its argument that it doesn’t make sense to have an agreement in goods without anything substantial in services, things changed for the better at the Bangkok meeting on August 30-31.

“All RCEP members have agreed to give their binding offers on easing movement of workers by October 10. These will be evaluated and further requests would be made till an agreement is reached,” the official said.

What remains to be seen though is the quality of offers in services made by member countries in the area.

In the area of goods, India agreed to move beyond its offer made at the meeting in Cebu (in 2016) where it had proposed to eliminate tariffs on 86 per cent of items for the ASEAN, Japan and South Korea and 74 per cent for China, New Zealand and Australia.

It, however, impressed upon RCEP members of its need to hold bilateral discussions with China, New Zealand and Australia so that it could protect a larger number of items from tariff cuts and elimination depending on the negotiations.

“RCEP members have now agreed to bilaterals with certain countries. We can have carve-outs to protect sensitive commodities and have longer implementation periods for tariff elimination for certain items from certain countries. This can be as long as twenty years or even more,” the official said.

Published on September 04, 2018
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