Economy

RCEP: India gets Trade Ministers on board on ‘single undertaking’ for goods, services

Amiti Sen New Delhi | Updated on January 15, 2018 Published on November 07, 2016

New Delhi demands flexibility to protect more items, more time for implementation

India has managed to convince its partner countries negotiating the Regional Comprehensive Economic Partnership (RCEP) to insert the words ‘single undertaking’ for both goods and services in the joint statement of the second inter-sessional Trade Ministers meeting in Cebu last week.

This will ensure that the pact on services is signed jointly with the one on goods and the country does not lose its negotiating plank for services.

“We were concerned when the first ministerial meeting in Laos earlier this year did not mention ‘single undertaking’ in the declaration as it led to the possibility of a separate agreement in goods being carved out, leaving services for later. We pursued the matter and ensured that the important words get incorporated this time in Cebu,” a government official told BusinessLine.

The RCEP, which has 16 members including the 10-member ASEAN, India, China, Japan, South Korea, Australia and New Zealand, aims to create one of the largest free trade blocs in the world as the countries account for 45 per cent of the world population and over $21 trillion of gross domestic product.

Need for ‘deviations’

India also asserted the need for ‘deviations’ in goods that would enable it to give lower concessions to countries such as China, New Zealand and Australia with which it does not have free trade pacts. “India has demanded the flexibility to protect more items against high tariff cuts in the case of certain countries, including China, and also longer implementation period,” the official said.

A single undertaking, as promised in the latest joint statement of RCEP Trade Ministers, means that the final agreement would see pacts in all the three core areas of goods, services and investment being signed simultaneously. New Delhi had lost out on the chance to strike a good deal in services with the ASEAN in the free trade agreement signed between the two, as it had agreed to seal a pact in goods first. This resulted in no bargaining chip left for the country when it negotiated a deal in services.

Officially agreeing on a single undertaking by RCEP members is just half the battle won for the country. It has to not only ensure that most of the important sectors in all important modes of services--including Mode 4 which refers to free movement of professionals — get covered, but the concessions offered also have to be generous.

“The details of the concessions in goods and services are yet to be thrashed out. What India gives in goods will definitely be also tied to what it gets in services,” the official added. In the joint statement, the Ministers asked all negotiators to follow through on the strategic guidance provided and be responsive of the need of members to exercise flexibility in addressing the sensitivities and interests of each participating country.

Published on November 07, 2016
This article is closed for comments.
Please Email the Editor