 "Govt girds for next RCEP trade talks")
The government is preparing for a fight at the next round of negotiations over the Regional Comprehensive Economic Partnership (RCEP) agreement.
This is after its latest move regarding a single rate of tariff reduction did not elicit a positive response from other nations, say trade experts and officials.
RCEP is a proposed free trade agreement (FTA) between the 10 countries of Asean (Association of Southeast Asian Nations) and six others with which this bloc has FTAs — Australia, China, India, Japan, South Korea, and New Zealand. The negotiations formally began in end-2012. The Asean nations are Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Cambodia, Laos, Myanmar, and Vietnam.
The government's shift in stance from three-tiered differential levels of reduction to a single one, applicable to all RCEP members, at the Laos ministerial meeting earlier this month, had been among its boldest move since the talks started.
“There has been no significant improvement in negotiations with regard to merchandise trade at the latest round of negotiations,” said a commerce ministry official, on the condition of anonymity. He added that though countries seemed favourable to India’s new stance, the talks have barely progressed and India was under pressure for the next round.
Under the previous plan, the 10 Asean countries were being offered up to 80 per cent tariff liberalisation. Of this, 65 per cent elimination was to come into force immediately upon completion of the agreement. The other 15 per cent was to happen over 10 years. In the second tier, India offered 65 per cent tariff elimination to South Korea and Japan, with which it has FTAs.
While mega goods exporter China had opposed the approach, India managed to have Japan and Korea endorse its plan.
However, the Asean bloc had presented a joint paper in support of single tariff reduction during the 13th round of negotiations in New Zealand, allegedly after persuasion by China.
The government is now cautiously approaching tariff reduction with regard to China, with which it has a large trade deficit, an official said. While the principle of a single rate of reduction will be applicable to all nations, the number of tariff lines under such reduction, as well as the phasing-out period, will be different for China, he added. The period for phasing out tariff lines for imports from China could be 20-30 years, as it is essential to ensure Indian business has enough time to improve its competitiveness.
However, commerce and industry minister Nirmala Sitharaman told reporters on Wednesday that the departure from the earlier stance represented normal progression in the negotiations, as no other nation was on board with the earlier idea. She added countries were looking for a list of common concessions, with minimum deviation with regard to some items.
India is primarily interested in securing greater market access for services trade and is pushing for easing restrictions in the sector. It is especially looking at opening up issues under Mode-4, which deals with cross-border migration of services professionals. While the latest round has not seen the country receive better offers on services, the Indian team is assessing the nature of offers on about 90 services categories.
Experts have also cautioned against India’s rigid stance against early harvest, which refers to accepting favourable trade terms in one pillar of negotiations as they happen. Instead, it aims to implement all agreements as a package. The official quoted earlier explained it was not in India’s interest to agree to an early harvest, as the terms were not favorable to us across most subjects.
This is after its latest move regarding a single rate of tariff reduction did not elicit a positive response from other nations, say trade experts and officials.
RCEP is a proposed free trade agreement (FTA) between the 10 countries of Asean (Association of Southeast Asian Nations) and six others with which this bloc has FTAs — Australia, China, India, Japan, South Korea, and New Zealand. The negotiations formally began in end-2012. The Asean nations are Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Cambodia, Laos, Myanmar, and Vietnam.
The government's shift in stance from three-tiered differential levels of reduction to a single one, applicable to all RCEP members, at the Laos ministerial meeting earlier this month, had been among its boldest move since the talks started.
“There has been no significant improvement in negotiations with regard to merchandise trade at the latest round of negotiations,” said a commerce ministry official, on the condition of anonymity. He added that though countries seemed favourable to India’s new stance, the talks have barely progressed and India was under pressure for the next round.
Under the previous plan, the 10 Asean countries were being offered up to 80 per cent tariff liberalisation. Of this, 65 per cent elimination was to come into force immediately upon completion of the agreement. The other 15 per cent was to happen over 10 years. In the second tier, India offered 65 per cent tariff elimination to South Korea and Japan, with which it has FTAs.
While mega goods exporter China had opposed the approach, India managed to have Japan and Korea endorse its plan.
However, the Asean bloc had presented a joint paper in support of single tariff reduction during the 13th round of negotiations in New Zealand, allegedly after persuasion by China.
The government is now cautiously approaching tariff reduction with regard to China, with which it has a large trade deficit, an official said. While the principle of a single rate of reduction will be applicable to all nations, the number of tariff lines under such reduction, as well as the phasing-out period, will be different for China, he added. The period for phasing out tariff lines for imports from China could be 20-30 years, as it is essential to ensure Indian business has enough time to improve its competitiveness.
However, commerce and industry minister Nirmala Sitharaman told reporters on Wednesday that the departure from the earlier stance represented normal progression in the negotiations, as no other nation was on board with the earlier idea. She added countries were looking for a list of common concessions, with minimum deviation with regard to some items.
India is primarily interested in securing greater market access for services trade and is pushing for easing restrictions in the sector. It is especially looking at opening up issues under Mode-4, which deals with cross-border migration of services professionals. While the latest round has not seen the country receive better offers on services, the Indian team is assessing the nature of offers on about 90 services categories.
Experts have also cautioned against India’s rigid stance against early harvest, which refers to accepting favourable trade terms in one pillar of negotiations as they happen. Instead, it aims to implement all agreements as a package. The official quoted earlier explained it was not in India’s interest to agree to an early harvest, as the terms were not favorable to us across most subjects.
