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RCEP pact: India set to host regional trade deal talks in Dec

LiveMint logoLiveMint 10-06-2014 Asit Ranjan Mishra

New Delhi: India sees a deal under the ambitious regional comprehensive economic partnership (RCEP) to boost its services exports and is all set to host negotiations of the mega regional trade deal in December.

The 16-member grouping is engaged in hammering out issues that need to be included in negotiations with the aim of concluding a deal by the end 2015.

The fifth round of negotiations is scheduled to be held in Singapore from 23 to 27 June.

RCEP negotiations comprise the 10 economies of the Association of Southeast Asian Nations (Asean) region and six of its free trade partners—India, China, Japan, Korea, Australia and New Zealand, started in May 2013 in Brunei.

The regional economic pact aims to cover trade in goods, trade in services, investment, economic and technical cooperation, competition and intellectual property.

The negotiations are at an early stage and countries are gauging each other’s response, a commerce ministry official said, requesting anonymity. “We expect negotiations to pick up next year. But meeting the December 2015 deadline to close a deal may be difficult,” he added.

India’s interests lie mostly in services, apart from removing technical barriers to trade such as under sanitary and phyto-sanitary measures, the official said.

“We also have some interest in trade in goods like in pharma and textiles. In investment also we have interest in both outward and inward investments,” he added.

Dealing with China with which it shares a $36 billion trade deficit may be a challenge.

“It all depends on how we negotiate the deal. We have to take advantage of it,” the official added.

By joining RCEP, India will gain preferential market access to 15 countries in the region and would gain from price competitiveness, according to Ram Upendra Das, professor at Research and Information System for Developing Countries.

Even though India has desisted from signing any bilateral trade pact with China for economic and non-economic factors, dealing with its northern neighbour would be easier through a grouping like RCEP, Das said.

India also considers its joining the RCEP negotiations crucial since it is not part of the other two mega regional trade deals under negotiations—the trans-pacific partnership (TPP) and transatlantic trade and investment partnership (TTIP)—led by the US because of the high-level of ambitions proposed for the deal.

The TPP is a proposed trade agreement under negotiation among 12 countries—Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam. TTIP is a trade and investment agreement under negotiation between the European Union and the US.

In a statement after the fourth round of negotiations were held in April in Nanning, China, the Japanese ministry of foreign affairs said in this round of negotiations, the scope and method of negotiations, amongst others, were discussed.

“It was decided that from the next round of negotiations, sub-working groups on sanitary and phytosanitary measures, as well as on standards, technical regulations and conformity assessment procedures will be established,” it added.

RCEP envisages regional economic integration leading to the creation of the largest regional trading bloc in the world amounting for almost 45% of the world population with a combined gross domestic product of $21.4 trillion.

With the diversity in the economies of the RCEP participants, “it will take immense effort, cooperation and compromise among the participants to arrive at a mutually satisfactory outcome which addresses the concerns of all the participants”, former trade minister Anand Sharma said while attending the first meeting of the RCEP trade ministers at Brunei in August 2013

“India, while maintaining a single schedule, will need adequate flexibility to address her sensitivities which may differ for each individual participating country,” he said. “Besides hoping to carve out a niche for itself in the regional value chains, India expects to benefit from the large integrated market for services and investments.”

RCEP negotiations aim to achieve a modern, comprehensive, high-quality and mutually beneficial economic partnership agreement establishing an open trade and investment environment in the region to facilitate the expansion of regional trade and investment and contribute to global economic growth and development; and boost economic growth and equitable economic development, according to Asean’s website.

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