Why did India decide not to join the RCEP agreement?
NEW DELHI: The Indian government announced Monday its decision not to join the 16 nations Regional Integral Economic Association (RCEP), as the negotiations did not address New Delhi's concerns, sources said.
The current form of the RCEP Agreement does not fully reflect the basic spirt and the agreed guiding principles of RCEP. It also does not address satisfactorily India's outstanding issues and concerns In such a situation, it is not possible for India to join RCEP Agreement ," top government sources said.
India's position is a mixture of pragmatism, the need to safeguard the interests of the poor and the effort to give an advantage to the Indian services sector. Although it did not shy away from opening up to global competition in all sectors, India firmly defended a favorable outcome for all countries and all sectors.
Here are some key points:
* India played in the lead, emphasizing the need to address India's concerns about trade deficits and the need for other countries to open their markets to Indian services and investments.
* India was constant in raising its problems from day one during the RCEP negotiations. The issues on which the government made its position clear included the threat of circumvention of the Rules of Origin due to the tariff difference. It also promoted a fair agreement that addressed the problems of the trade deficit and the opening of services.
* In its negotiations, the government requested safeguard mechanisms to prevent sudden increases in imports and safeguard the interests of national industry and also raised the unfeasibility of MFN obligations in which it would be obliged to grant similar benefits to RCEP countries that granted to others.
* There were also no credible guarantees for India about market access and non-tariff barriers. In addition, I had very valid concerns about maintaining 2014 as the base year for tariff reductions.
* In his speech at the RCEP summit, Prime Minister Narendra Modi said: India advocates greater regional integration, as well as freer trade and adherence to a rules-based international order. India has been actively, constructively and significantly involved in the RCEP negotiations since the beginning. India has worked for the precious goal of achieving balance, in the spirit of giving and receiving.
* Cuando mido el RCEP Agreement con respecto a los intereses de todos los indios, no obtengo una respuesta positiva. Por lo tanto, ni el Talismán de Gandhiji ni mi propia conciencia me permiten unirme a RCEP. PM Modi additional.
* The government of India during UPA opened 74% of its market to ASEAN countries, but richer countries such as Indonesia opened only 50% for India. He also agreed to explore an India-China FTA in 2007 and join the RCEP negotiations with China in 2011-12. However, the impact of these decisions resulted in a greater trade deficit with the RCEP nations: from $ 7 billion in 2004 to $ 78 billion in 2014.
* The domestic industry is still reeling under the impact of these decisions. The government under PM Modi has sought to solve these issues and negotiations are in process. Therefore, it is evident that a further unequal deal under RCEP could not be signed without resolving past issues in previous FTAs including Asean and ensuring a strict and fair framework in RCEP.
* Bad negotiations under the previous FTA government caused damage to Indian industry and led to a distorted trade balance. India has already reached an agreement in Asean for a review of the FTA.
* A joint working group is discussing the issues that will be addressed in the Japan FTA on 11/18 and will also discuss the FTA review. Various industries, especially farmers, the small-scale sector and the handloom, benefit from decisions made on imports.
* An adequate 5 percent safeguard right has been imposed on palm oil to address increased imports and protect the interest of the national industry. This will also benefit Indian farmers.
* To guarantee a remunerative price to farmers, the importation of peas and legumes has been restricted and the importation of only 4 lakh MT from Toor and 3 lakh MT from Moong and Urad has been allowed for the fiscal year 2019-20.
* India has been at the vanguard in protecting the interests of the poor especially agriculture sector. The country managed to protect its farmers' interests and ensure food security for its poor in WTO in Buenos Aires under PM Modi.
* The Steel Import Monitoring System (SIMS) was launched to monitor the import of steel. This will allow timely political interventions and all interested parties will have advance information on the imports of different steel products.
* Under PM Modi, India has become one of the world's most open economies with very few barriers to trade both tariff and non-tariff. It is exploring trade agreements with USA and European Union, where Indian industry and services will be competitive and benefit from access to large developed markets.