Disappointed but understand India move, say Asean states Trade bodies praise Modi govt decision
RCEP Ten nations, which were negotiating with the grouping’s six FTA partners, were keen on India’s inclusion as balance against China
THE DEAL WAS OPPOSED BY SEVERAL SECTORS, INCLUDING DAIRY FARMERS WHO WERE APPREHENSIVE ABOUT CHEAPER IMPORTS FROM NEW ZEALAND AND AUSTRALIA
NEW DELHI: India’s decision not to join the RCEP trade pact evoked both understanding and disappointment among Asean states on Tuesday as key regional players such as Japan said they would work towards a deal that includes the country.
Prime Minister Narendra Modi told a summit in Bangkok of the leaders of the 16 countries negotiating the Regional Comprehensive Economic Partnership (RCEP) on Monday that India wouldn’t join the deal as it doesn’t satisfactorily address the country’s issues and concerns. He also cited the potential impact on the livelihood of India’s most vulnerable citizens.
The 10 Asean states, which were negotiating the deal with the grouping’s six FTA partners, Australia, China, India, Japan, New Zealand and South Korea, were keen on the inclusion of India as a balance against China. As the dust settled following Modi’s announcement, diplomats from several Asean states said they understood the reasons behind India’s decision.
Indian officials cited issues such as inadequate protection against import surges, particularly from China, insufficient differential with China, circumvention of rules of origin and lack of credible assurances on market access and non-tariff barriers as reasons for opting out of the agreement.
An envoy from an Asean state, who spoke on condition of anonymity, said he was disappointed but could understand India’s decision. “I think all Asean states wanted India in, for obvious reasons. Agreeing would not have been the end of the issue for India – it still needs a lot of work domestically,” the diplomat said.
India’s future inclusion in the deal is “always possible” but depends on whether the country “can live with what has been agreed on by the other 15 states or if the issue is solely with China”, the envoy said. “I’m not sure whether the Indian issues involve all 15 states, or just their bilateral,” the envoy added.
Another envoy of an Asean state closely involved in the negotiations, too, expressed disappointment but said the move could be seen as a “win-win outcome” by all sides. “The 15 RCEP states get to inform their constituencies back home that they got a deal and India gets to tell its constituencies that it held out to safeguard domestic interests,” said the second envoy.
“If a deal could be struck before the 15 states complete their legal scrubbing, then it could be 16 members.
If not, the 15 will proceed without India. Meanwhile, the 15 states will be able to benefit, although not as much as with India in the RCEP,” the second envoy said.
The Asean diplomats noted that RCEP bucks the trend of protectionism being equated with nationalism, and the deal is better for the world economy. “In this global economic climate, we need to bank what results we can. If
India can come on board later, fine,” said a diplomat.
In Tokyo, Japan’s trade minister Hiroshi Kajiyama told reporters that his country will work towards a deal including India. This will be in line with Prime Minister Shinzo Abe’s policy of bolstering ties with India to balance China’s growing power. “Our country wants to play a leading role toward reaching an early agreement between all 16 countries, including India, with the aim of signing it in 2020.”
Indonesia’s foreign minister Retno Marsudi said India still has problems with RCEP but all participating countries “will work together to solve these problems in a mutually satisfying way”, according to an official statement. In a related development, China – which has been pushing for the signing of RCEP against the backdrop of a trade war with the US – said on Tuesday that India’s outstanding concerns can be addressed on the basis of “mutual understanding”.
Chinese foreign ministry spokesman Geng Shuang told reporters: “The RCEP is open. We will follow the principle of mutual understanding and accommodation to negotiate and resolve those outstanding problems raised by India and we welcome an early joining by India.”
NEW DELHI: Indian Industry and farmers’ bodies on Tuesday appreciated Prime Minister Narendra Modi’s decision not to join the Regional Comprehensive Economic Partnership (RCEP) grouping, a move that addresses concerns raised by micro and small units and the dairy industry.
Modi announced on Monday that India wouldn’t join the free trade agreement, telling leaders of the 15 other participating countries that the deal doesn’t address the country’s “outstanding issues and concerns”.
The deal was opposed by several sectors, including dairy farmers who were apprehensive about cheaper imports from Australia and New Zealand.
“On behalf of 36 lakh milk producers of Gujarat, Amul has thanked the Prime Minister for his exemplary leadership in protecting 10 crore milk producer families of India. It has appreciated the vision and resolve of the Prime Minister for supporting the domestic milk producers against the flood of imports of dairy products from New Zealand and Australia under the proposed RCEP,” Indian dairy major AMUL said in a statement.
The Confederation of All India Traders said Indian exporters wouldn’t be able to get the right value for their products under the deal as most manufacturers “would have been ignored, citing low quality or high price by the RCEP nations”. It said, “Overall, the entire vision of the Prime Minister’s Make in India would have been rendered futile and ineffective had India signed the RCEP in its present form...”
The All India Kisan Sangharsh Coordination Committee (AIKSCC) claimed victory for “forcing the government” to back out of the deal in its statement. It said it was “happy that good sense has prevailed on this government and its decision to barter away the life and livelihood of crores of farmers, workers and small businesses has been averted”. “AIKSCC reminds this government that agriculture should never be brought into the ambit of free trade agreements as it involves livelihoods of more than half the nation’s population and has the potential of harming the nation’s food sovereignty.”
Apex industry body Confederation of Indian Industry (CII) said India’s decision to pull out of RCEP reflects the views of its stakeholders. “India never wanted to remain out of the 16-member RCEP trading block. The government has had extensive consultations with the wide spectrum of stakeholders. The objective was to get first-hand inputs from industry stakeholders and...india articulated its position in the last round of negotiations and ministerial meetings thereafter,” said CII president Vikram Kirloskar. “The decision taken by India...to pull out from RCEP reflects the views of a majority of Indian stakeholders.”