Prime Minister Narendra Modi may have to take a final call on whether India will participate in the proposed Regional Comprehensive Economic Partnership (RCEP) trading bloc when he represents India in the Leaders Summit early next month with his counterparts from 15 other member countries, including China, and the ASEAN as all pending issues will be placed before the leaders.
“India has time till October 24 to sort out all pending issues with member countries bilaterally, including tariff differentials, rules of origin (ROO), e-commerce, the auto-trigger mechanism, the base-rate for tariff cuts, local measures and ISDS (Investor State Dispute Settlement). All issues that are pending beyond the deadline will be placed before the leaders at the RCEP Summit on November 4 and they will take a final call,” a person close to the negotiations told B usinessLine .
The decision of putting in place a 10-day work plan to sort out all loose ends was taken after the RCEP Trade and Economic Ministers, who met in Bangkok last week, were not able to work out compromises in most of the contentious areas of the negotiations.
While India has the largest number of unresolved problems that need to be bilaterally worked out, there are other members too such as Japan, South Korea, Philippines and Malaysia that have issues to settle with the larger membership.
“Commerce & Industry Minister Piyush Goyal stressed at the RCEP Ministerial in Bangkok that the concerns that Indian industry and farmers had, especially about increased competition from China hurting their livelihoods, had to be addressed fully in the pact. Therefore, it was important for India to have tight rules of origin rules and a vibrant auto-trigger mechanism to check against import surges among other safeguards,” the official said.
Officials from RCEP countries will meet this week in Bangkok to sort out ROO which are put in place to ensure that third countries don’t route their exports through another country. India is in favour of tough ROO so that Chinese goods cannot be routed through ASEAN countries into India. But there has been huge opposition to India’s proposal from other members, including China and the ASEAN.
New Delhi’s other proposal of putting in place an auto trigger mechanism for automatic imposition of safeguard duties once imports cross a given threshold limit has also been met with a lukewarm response. Most members are insisting that it be restricted to just a handful of items (about 100) and be implemented for a short period.
It is important for India to have effective safeguards against import surges as the RCEP will be an ambitious pact with tariff elimination taking place for more than three-fourths of traded goods.