These countries want to conclude the pact this year and say this is the “last window of opportunity” as India will get into election mode very soon. Trade negotiators from the 16 countries are meeting in Thailand at present to reduce differences before a key minister-level meeting next month in Singapore.
“Things are not very bright. They say this is the last window of opportunity to conclude the agreement this year,” said a negotiator.
Negotiations on intellectual property, rules of origin and ecommerce are being held besides trade in goods, services and investment in the ongoing round of talks.
Commerce secretary Rita Teaotia has said speedy and successful conclusion of the agreement would be possible only with inclusion of a higher level of services and investment in the India-Asean trade basket.
“Today, the conversation is that the agreement on goods is easy and therefore the ambition should be to move from 86% (of total traded items) to 92%. On the other hand, the argument is not to go beyond 60% of services and that too with several caveats,” she recently said at an event.
RCEP is a comprehensive free-trade agreement including goods, services, investment, competition and intellectual property rights between 10 Asean countries and six free trade agreement partners — Australia, China, India, Japan, South Korea and New Zealand. Of these nations, India has trade deficit with as many as 10 countries, including China, South Korea and Australia.
“The cardinal principle of any trade deal is give and take, but we are not getting anything from this pact at this point,” said Biswajit Dhar, professor at the Centre for Economic Studies and Planning in the School of Social Sciences, Jawaharlal Nehru University.
Another trade expert tracking the agreement said this pact without a high level of ambition in services and investment would open a “Pandora’s box” where all developed countries including the US, Canada and the EU would want access to India’s goods market.
“We will be under pressure to sign a goods-only agreement initially by all these countries as they all want our goods market,” he said.
While others want a speedy conclusion, there is divided opinion about the trade agreement in India. Many departments and ministries, including agriculture, defence and economic affairs, have opposed the deal, saying it would hurt India’s interest.