Modi brac­ing for tough RCEP meet nex­tweek

Business Standard - - FRONT PAGE - SUBHAYAN CHAKRABORTY

Prime Min­is­ter Naren­dra Modi may have a tough task on his hands next week when he reaches Sin­ga­pore to meet lead­ers from na­tions ne­go­ti­at­ing the pro­posed Re­gional Com­pre­hen­sive Eco­nomic Partnership pact. The prime min­is­ter is likely to ask for more time to con­clude the talks. From November 14, Modi will be on a two-day visit to Sin­ga­pore. SUBHAYAN CHAKRABORTY writes

Prime Min­is­ter Naren­dra Modi may have a tough task on his hand next week when he reaches Sin­ga­pore to meet the lead­ers from na­tions ne­go­ti­at­ing the pro­posed Re­gional Com­pre­hen­sive Eco­nomic Partnership (RCEP) pact. The PM is likely to ask for more time to con­clude the talks.

Be­gin­ning November 14, Modi will be on a two-day visit to Sin­ga­pore for the 13th East Asia Sum­mit, where he is set to hold sep­a­rate talks with lead­ers from across Asia-Pa­cific. His visit will co­in­cide with the an­nual sum­mit of the 10-mem­ber As­so­ci­a­tion of the South­east Asian Na­tions (Asean) bloc, also taking place in Sin­ga­pore from November 11-15.

There, Modi will have to al­lay the fears of In­dia’s Asean al­lies, who have re­peat­edly tar­geted New Delhi for de­lay­ing a con­sen­sus on the RCEP. The am­bi­tious pact is pro­posed be­tween 10 Asean economies and six oth­ers — New Zealand, Aus­tralia, China, In­dia, Ja­pan and South Korea — with which the group­ing cur­rently has free-trade agree­ments (FTAs). So far, 24 rounds of talks have con­cluded, apart from six min­is­ter-level meets.

In­dia has cru­cial dif­fer­ences on tar­iff re­duc­tion, mar­ket ac­cess and ser­vices trade norms, such as those on the free move­ment of trained pro­fes­sion­als with other na­tions.

As a re­sult, Modi will have lim­ited choice other than stress­ing upon In­dia’s lat­est po­si­tion — that of a re­quest for more time to de­cide on tar­iff rates, es­pe­cially with elec­tions in 2019, a se­nior trade ne­go­tia­tor said. How­ever, he is ex­pected to com­mit to the RCEP de­spite the cur­rent deadlock, he added.

Due to the strain in talks, Com­merce and In­dus­try Min­is­ter Suresh Prabhu will be in Sin­ga­pore to hold last minute talks with his RCEP counterparts on November 12-13. At the last trade min­is­ters’ meet, a joint pro­posal had been adopted to de­cide on the broad con­tours of the mega-re­gional deal by end of 2018. “This ‘pack­age of year-end de­liv­er­ables’ has been pushed by the Asean bloc with sup­port from China, which is in­creas­ingly wary of the trade po­ten­tial with the US un­der the volatile Trump regime. But it men­tions only four ma­jor chap­ters of the goods trade, with the vast ma­jor­ity still see­ing no progress. It was also silent on greater mar­ket ac­cess for the ser­vices trade — an area of prime in­ter­est to In­dia,” said a se­nior trade ex­pert present dur­ing the meet.

The up­com­ing talks may suf­fer the same fate as the last — when dis­cus­sions had bro­ken down with In­dia be­ing at­tacked for de­lay­ing a con­sen­sus on the RCEP, he added. The pro­posed pact is to have 21 chap­ters across goods, ser­vices and in­vest­ment. The short-term goal is to have five or six more chap­ters com­pleted be­fore the year end.

The last of th­ese, held in Auck­land last month, saw de­vel­oped economies op­pose In­dia’s plans of deal­ing with China sep­a­rately. New Delhi had of­fered to re­duce tar­iffs for Bei­jing over a 20-year pe­riod while sug­gest­ing shorter wait pe­ri­ods for other economies such as Aus­tralia, New Zealand and South Korea.

“The largest com­po­nent of our trade deficit stems from that with China at more than $63 bil­lion; so we ob­vi­ously need more time to ad­just to lower im­port du­ties in a post-RCEP world,” said a se­nior Com­merce Depart­ment official.

The pro­posed pact is to have 21 chap­ters across goods, ser­vices and in­vest­ment

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