A crucial meeting of trade ministers of 16 countries will meet on Friday in Bangkok, Thailand, to iron out differences on the proposed mega free-trade pact RCEP, an official said. The meeting is precursor to the RCEP leaders' summit, scheduled on November 4 in Bangkok, which will be attended by Prime Minister Narendra Modi.
The RCEP (Regional Comprehensive Economic Partnership) is being negotiated by 16 countries -- 10-member ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) and Australia, China, India, Japan, South Korea and New Zealand.
"Ahead of the RCEP leaders' summit, the trade ministers will hold discussions. They would also finalise statement of leaders for RCEP summit," the official added.
Commerce and Industry Minister Piyush Goyal will attend the meeting. He would also hold bilateral talks there with countries such as China, with which most of the issues have not yet been settled. Talks at the official level is already going on between the member countries to iron out differences. The negotiations for the RCEP deal have reached the last phase. As per the target of the members, conclusion of the negotiations could be announced in the leaders' summit.
Technically, India will have time till the end of February 2020 to sort out bilateral market access issues. After the announcement of conclusion, the legal text would be finalised. The legal scrubbing for the RCEP text will continue till the end of February 2020.
If everything goes as per the plan, the agreement would be signed in June 2020. After that, RCEP members will have two more years to ratify the pact.
This trade agreement assumes significance as several domestic players from industries such as metals, dairy, electronics, and chemicals have raised serious concerns over this agreement due to the presence of China in the grouping, with which India has a huge trade deficit of over $50 billion.
According to sources, strong RCEP-specific safeguard duty mechanism is being negotiated by all members. If import of a product increases significantly, a member nation would be able to impose safeguard duty for up to six years. As many as 28 rounds of talks have been held at the level of chief negotiators and no more rounds are scheduled now.
India is expected to reduce or eliminate duties on about 74-80 per cent of goods imported from China under the proposed agreement. India may also cut customs duties on 86 per cent of imports from Australia and New Zealand, and 90 per cent of products from ASEAN, Japan and South Korea, with which India already has a comprehensive free-trade agreement.
The cut or elimination of these duties could be implemented over a period of 5, 10, 15, 20 and 25 years.
There is a plan for an auto-trigger mechanism, wherein India will have the option to increase customs duties if there would be a sudden surge in imports of a particular product, particularly from China, to protect the domestic industry.
India has registered trade deficit in 2018-19 with as many as 11 RCEP member countries including China, South Korea and Australia.
The agreement aims to cover issues related to goods, services, investments, economic and technical cooperation, competition and intellectual property rights.