India may not commit to concluding RCEP pact by year-end
05 Nov 2018
India is unlikely to sign into a mega trade deal that it is negotiating with 15 countries of the Asia-Pacific region, including China, Japan and the 10-member ASEAN group, and it has some supporters this year.
Member countries of the Regional Comprehensive Economic Partnership (RCEP) will be meeting in summit in Singapore on 14 November, where members will sign a joint statement to conclude an agreement by the year-end.
However, Prime Minister Narendra Modi will have to do a balancing act by expressing support for the trade agreement, but not committing to conclude an agreement as proposed.
While countries like China, South Korea, Japan and New Zealand want an agreement to the effect that the members have made “substantial conclusion” of the agreement, India and others may demand the words to be replaced by “substantial progress.”
Reports say, India will not be signing into the joint statement being promoted by some member countries that could commit it to a pact by the year-end
While India was alone in opposing a quick-fix RCEP at the Auckland round, some other members, including Vietnam, the Philippines and Malaysia joined in later, saying that things were not ripe enough to conclude a pact by the year-end.
With support from like-minded members, Prime Minister Modi will now hopefully not be under pressure at the Singapore summit to commit to agree to a package agreement by the year-end.
For one thing, the package agreement does not fully take care of India’s economic interests and could be damaging for the government with the general elections scheduled next year. A trade deal with countries like China could be debilitating for Indian industry and farmers.
What most RCEP members, including Japan, South Korea, Australia and New Zealand, were trying to do at Auckland was to get the words ‘substantial conclusion’ included in the joint declaration of the summit to be signed by the heads of state next week.
“The words ‘substantial conclusion’ have a legal connotation. If countries agree to it, then there is no getting out of it, and the decision has to be announced to media and placed before Parliament for clearance. India refused to take on this commitment at the summit, and insisted that the words ‘substantial progress’ be used instead.