Introduction: - RCEP 6th
inter-sessional ministerial meeting
The 6th interregional ministerial meeting of regional
comprehensive economic partnership RCEP was held in Singapore. The meeting was
reviewed after 6th RCEP ministerial held in August 2018.
What was the aim of the meeting?
In the meeting, all the partner countries agreed to finalize
trading deal by the end of this year. From Indian side minister of state for
commerce & industry and consumer affairs, food and public distribution had
attended the meeting.
What is RCEP?
Regional Comprehensive Economic Partnership (RCEP) – is a proposed free trade agreement (FTA) or
comprehensive regional economic integration agreement between 10-ASEAN
countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar,
Philippines, Singapore, Thailand, Vietnam) and its six FTA
partners (Australia, New Zealand, India, China, Japan and Korea). The
negotiations For RCEP was formally launched at 2012 ASEAN summit in
Cambodia.
10+6 RCEP member states accounted for population of 3.4
billion people with total GDP (in terms of PPP) of 49.5$ trillion,
approximately 38% of the world’s GDP and 29% of the world trade.
RCEP is viewed as an alternative to the Trans-Pacific
Partnership (TPP), a proposed trade agreement that includes several Asian
and America nations but excludes china and India.
RCEP and India agreement
-- India has insisted on concluding a “balanced and collectively
satisfactory” RCEP agreement.
-- India wants a services pact to be included in the government.
Why India wants services pact in RCEP – Services are becoming a dominant driver of growth in both developed
and developing countries. It contributes almost two-thirds of India’s GDP.
Surplus (more income) in service trade finance is almost equal to the half of
India’s trade deficit. India is pushing in services sectors for easier movement
of its professionals to RCEP member countries.
Why is India reluctant in joining the RCEP?
RCEP pact India has negotiated with 15 other nation including china;
the rising pressure for opening up markets in goods is making negotiations
unsustainable.
India is not able to justify its continued efforts to reach
a compromise. India’s inability to negotiate a good and services deal in the
past, RCEP negotiations, especially with China, need a second thought. There
are following reasons which should be considered from India’s front-
1. Indian industry will have more
to lose than gain if it agrees to a liberal tariff elimination schedule
specially with respect to china at a time of growing protectionism in the
world.
2. Government
think tank NITI Aayog, in a note on free trade agreements (FTAs) and their
costs for India, has argued that the country needs to rethink joining the
Regional Comprehensive Economic Partnership (RCEP) as it will be disastrous
to provide more market access to China, which is a key player in the
grouping.
3. The NITI Aayog
note said while trade agreements are to promote bilateral trade, with both
parties benefiting as a result of trade. With China, India’s trade seems to be
skewed. China’s capacity overhang in most sectors may lead to a surge
of imports into India with very limited access for Indian exports to the
Chinese market.
4. Growth in
infrastructure and in the consumption of steel, antidumping duties are crucial
at this stage. Accepting FTA will further hit steel Industry which is still
recovering. India’s steel ministry has strongly opposed the inclusion
of finished steel products in the proposed regional free-trade agreement,
saying it would have an adverse impact on the industry that’s recovering from a
crisis.
Conclusion
India has been collectively engaged in RCEP
negotiations with an aim to work towards a high quality, balanced and
inclusive outcomes that take into consideration sensitivities and interests of
member countries. 16 trade ministers will guide trade negotiating committee of
RCEP to enable negotiations move forward. It would benefit India as RCEP is a
mega trade pact that aims to cover goods, services, investment, economic and
technical cooperation, competition and intellectual property
rights.
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