The Hindu Business Line - 20 March 2019
Elections in five countries slows down RCEP negotiations temporarily
New govt in India to take a call on how much market access can be allowed to China
India has got a temporary relief from taking difficult decisions at the on-going Regional Comprehensive Economic Partnership (RCEP) talks as four other members including Indonesia, Philippines, Thailand and Australia, besides India itself, are busy in elections over the next couple of months.
The new government that assumes office in May, however, will have to soon go back to the negotiating table and decide on crucial matters such as tariff elimination for Chinese goods as most members have stuck to their demand for a year-end deal at the recent meeting of Trade Ministers, a government official said.
“With five of the 16 members of the proposed RCEP in election mode, it is not possible to have meaningful talks over the next two months. But, it seems that there is very low appetite amongst members on further relaxation of the deadline to conclude talks beyond the year-end. Pressure will be high on India to give its final commitments when full-fledged negotiations resume after May,” the official added.
The Trade Minister of RCEP countries — which includes the ten-member ASEAN, India, China, Japan, South Korea, Australia and New Zealand — agreed to intensify the negotiations, sort out all tricky issues and conclude the negotiations by the end of the on-going year, when they met in Cambodia early this month.
“Many members, including the ASEAN, are unhappy that last year’s deadline could not be met. Not only are members talking of a year-end deadline for concluding the talks, there is also a rough road-map to achieve that,” the official said.
The pact, which includes commitments in a number of areas such as goods, services, investments, government procurement and intellectual property, could lead to the largest free trade area in the world once implemented.
“India’s greatest area of concern remains China which is insisting that India offer it tariff elimination on a very high percentage of traded items. If India agrees to it, it could be a big blow for several industrial sectors in India already grappling with competition from Chinese products,” the official said.
The new government will have to take a call on the terms at which an RCEP deal would be acceptable to India.