Forum against FTAs | 6 December, 2016
The Indian government needs to answer crucial questions on the RCEP
Why is the Indian government signing the RCEP agreement, which allows foreign investors to sue governments, threatens access to life-saving medicines and puts at risk seed sovereignty? The 16th round of negotiations on this mega-regional RCEP began in Indonesia on 5 December 2016, at a time when another mega-regional FTA - the Trans-Pacific Partnership (TPP), post-Trump is in doubt. This makes RCEP the venue for the developed countries in Asia-Pacific to dump their WTO-plus ambitions.
With the 16th RCEP negotiations underway in Indonesia, the Indian government needs to answer crucial questions on the proposed mega regional free trade agreement between sixteen countries (10 ASEAN countries and their six FTA partners, namely, Australia, China, India, Japan, South Korea and New Zealand).
If accomplished, RCEP would pave the way to the creation of the largest free trade bloc in the world, covering 45 percent of the world’s population with a combined GDP of US$22 trillion and accounting for 40 percent of global trade.
Leaked chapters show problems of RCEP
A leaked chapter of the RCEP agreement includes proposals such as investor-to-state dispute settlement (ISDS) which allow foreign investors to sue governments at an international tribunal. These cases which broadly interpret investors’ rights and restrict governments’ ability to regulate have caused many developed and developing country governments like India and Indonesia to withdraw from their bilateral investment treaties (BITs). United Nations human rights bodies have also stated their serious concerns about ISDS. They have also recommended that in negotiations of FTAs like RCEP, the negotiating texts are published and the negotiations are conducted transparently with the participation of stakeholders including civil society.
Another leaked IP chapter verified that South Korea and Japan were pushing for data exclusivity, that could delay regulatory approval for medicines that are off patent, and provisions that will lengthen medicine patent monopoly periods. This will only serve to delay the market entry of affordable generic medicines and goes well beyond the intellectual property protections required by the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). India is the world’s largest producer of generic medicines and supplies more than 80% of generic anti-retro viral (ARV) medicine to treat HIV in low and middle income countries. If India is forced to sign onto TRIPS-plus measures, access to affordable essential medicines will be seriously compromised. Likewise, TRIP-plus & TPP-like IPR on seeds as Japan & Korea want in RCEP is unacceptable for our farming realities and seed cultures.
With TPP dead, why include its terms in RCEP?
The RCEP has gained prominence with the demise of the Trans Pacific Partnership (TPP) which US President-elect Donald Trump announced that the US will withdraw from. Concerned over the potential negative effects of TPP on jobs, economy and regulatory space, civil society groups from both sides of the Pacific launched popular campaigns focused on the secret nature of the negotiations and sought greater public participation during the negotiation process.
Many TPP members (in particular Japan, Australia and New Zealand) who are also members of the proposed RCEP will now shift their attention to this pact. These countries may further push for TPP-like provisions at RCEP to maximize the best possible outcome following the imminent demise of TPP trade deal. With the demise of the TPP, there is no justification for adhering to TPP texts in RCEP because these have no mandate. This point was raised in an open letter to governments in the 16 RCEP countries.
Approval of parliament required
The demise of TPP has eased pressure on India which is not supportive of an ambitious agenda on IPRs, investment and zero tariffs under the RCEP framework due to potential negative impacts on local producers and businesses. Given that world trade is slowing and protectionist tendencies are rising across the developing world, India should rethink its FTA strategy in the short- and medium-term.
There is a need to move away from free trade to economic cooperation and mutual aid for sustainable development that helps countries achieve ecological and social justice for the people of negotiating countries. Therefore, obligations of business and corporations should be specified in the agreement. The government should be obliged to get the approval of the parliament and state assemblies before inking the agreement.
The national media in India needs to address questions on RCEP to not only the PMO, but also the Ministry of Commerce & Industry.
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