New Delhi has rethink on regional deals on merchandise trade
10 Feb 2016
Pushed to the corner by a series of regional free-trade agreements that only helped to expand the country's trade deficit, India is slowly abandoning any further negotiations on trade in goods till there is progress in the area of liberalising trade in services, including movement of professionals.
India has decided to inform member countries of the Regional Comprehensive Economic Partnership that the next round of negotiations on trade in goods will depend on the progress of negotiations in services trade.
The next round of negotiations on the RCEP, a grouping that comprises 16 countries - the 10-member ASEAN along with India, China, South Korea, Japan, Australia and New Zealand - will take place in Brunei next week.
''We want to make our next offers in goods only after there is more progress in services. At Brunei, we will also try to build an alliance of like-minded countries to give weight to our demand. We hope South Korea and Japan and some ASEAN members support us,'' the Hindu BusinessLine quoted a government official as saying.
The decision follows a disappointing stance of the ASEAN towards New Delhi's push for a deal in services trade as part of the regional comprehensive economic partnership. India as a major economy in the region had agreed to a deal in goods before finalising a pact on services.
As in the World Trade Organisation where India got a disappointing deal in agriculture, the RECP with ASEAN and other regional economies gave India a raw deal.
No country, even major powers China, Japan and Korea, had offered anything worthwhile in Mode 4 of services (movement of workers) in the first round of offers exchanged between the members. ''On the other hand, most members are aggressive in goods, and intensive discussions on give and take are happening in the area. We have to insist on a balance at Brunei,'' he added.
At the same time, India cannot abandon the RECP altogether as it is imperative for the country to ensure preferential access to a number of markets in the region at a time when the US and 11 Pacific Rim countries, including Canada, Japan, South Korea, Chile, Australia, New Zealand, Peru, Vietnam, Malaysia, Brunei and Singapore, finalising the Trans Pacific Partnership pact that could create the world's largest free trade zone.
The RCEP, accounting for 45 per cent of the world population and a GDP of over $21 trillion, can match the TPP in size and scale.
But, whole its members, including China, South Korea, Japan and some ASEAN countries, have already started submitting requests for further opening of markets to individual members, New Delhi is working on a second paper on freer movement of contractual services suppliers (CSS) and independent professionals, which it hopes to circulate for discussion in Brunei.