Economy

Japanese Trade Minister to discuss RCEP pact with Goyal

Our Bureau New Delhi | Updated on December 09, 2019 Published on December 09, 2019

India’s decision to quit the RCEP deal talks was not taken well by some members   -  iStockphoto

Talks may discuss New Delhi’s concerns, suggest ways to make Indian industry more competitive

Japanese Trade Minister Hiroshi Kajiyama will meet his Indian counterpart Piyush Goyal on Tuesday to discuss the conditions under which New Delhi could get back into the trade negotiations for the proposed Regional Cooperation for Economic Partnership (RCEP) pact between 16 countries.

“The two Trade Ministers are likely to discuss in details the problems India had with the current framework of the RCEP pact. The way ahead may also be discussed,” an official told BusinessLine.

India’s concern

New Delhi had decided to exit the RCEP being negotiated by the 10-member ASEAN, China, India, South Korea, Japan, New Zealand and Australia at the Leaders Summit last month. It’s main concerns, mostly related to opening up markets for its key competitor China, remained unaddressed.

India’s decision to quit the group was not taken well by members such as New Zealand and Japan which officially said they wanted to sign an RCEP pact of which all 16 countries, including India, were members.

The RCEP countries (with the exception of India) decided to finalise the pact by February 2020.

Kajiyama is expected to propose measures that will increase the competitiveness of Indian industries with the help of information technology, the official said. It could give subsidies to Japanese IT firms to carry out research if they entered into joint ventures with Indian companies. The country could also offer help in making the farming and fishing sectors more efficient.

India’s biggest concern with the RCEP is related to the ‘rules of origin’ (ROO) agreed to by the other members. New Delhi believes that the ROO are very relaxed and would allow Chinese goods, which may be behind higher tariff walls for a longer period compared to goods from ASEAN, to circumvent the duties and flow into India from the shores of the ASEAN nations.

This could spell doom as India was being asked to consider bringing about 90 per cent of goods traded with the ASEAN to zero per cent.

India has also demanded that the base rate of duty (for calculating tariff cuts) should be 2019 instead of 2014, as agreed earlier, as those rates were not relevant any more.

An adequate Auto Trigger Safeguard Mechanism to save the economy against dumping of cheap imports and import surges was another of the country’s demands.

Published on December 09, 2019
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