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India urges RCEP members to abide by WTO services rules

LiveMint logoLiveMint 23-05-2017 Asit Ranjan Mishra

New Delhi: India has asked members of the Regional Comprehensive Economic Partnership (RCEP) group, including Australia and New Zealand, to abide by their multilateral commitments on the movement of professionals, in an effort to guard against growing protectionism across the developed world that could hurt India’s information technology sector.

RCEP is a grouping of 10 members from the Asean grouping and India, China, Japan, South Korea, Australia and New Zealand, which has been negotiating a trade deal since May 2013.

“Position of countries on services is changing rapidly on a real time basis. This is narrowing down our negotiating space,” a commerce ministry official said, speaking under condition of anonymity.

An expert on international trade, also requesting anonymity, said that India seems to have climbed down from its earlier tough stand on services negotiations in RCEP keeping in mind the evolving global economic scenario.

“Commitment on movement of skilled professionals under the existing World Trade Organisation (WTO) rules is pretty minimal. Asking countries to abide by such rules under RCEP means India gains nothing while it gives significant tariff concessions in goods to member countries including China,” he added.

India has offered to eliminate tariffs on 80% of traded goods, seeking flexibility to increase or decrease this common concession by 8 percentage points over a 20 year period, keeping in mind its high trade deficit with China.

However, countries such as Australia and New Zealand are insisting on a more ambitious trade deal with tariff elimination on 92% of traded goods.

The commerce ministry official said negotiations are expected to extend to the first half of 2018 and are unlikely to be completed this year.

A statement from the commerce ministry said India stressed that temporary movement of professionals should not be confused with immigration.

Commerce minister Nirmala Sitharaman “pointed out that a selective approach to the detriment of services would not be in the best interest of RCEP negotiations, and would be failing to acknowledge, promote and protect the strength and mutually beneficial nature of the current relationship, where Indian companies with limited expatriate presence had created over 100,000 local jobs in the RCEP countries, apart from cost saving and enhanced competitiveness,” the ministry statement further said.

RCEP member countries will resume negotiations in the 19th negotiating round scheduled to be held from 18-28 July in Hyderabad.

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