The recently concluded 7th RCEP Ministerial meeting for the proposed Regional Comprehensive Economic Partnership (RCEP) did not end in a resolution, reportedly after India’s call for retaining some level of protection for local goods through tariffs and seeking access to markets for its services, did not gain a foothold in the negotiations.
One would think that any trade agreement and more so one that calls itself a Regional Comprehensive Economic Partnership would have to be comprehensive in the concerns it addresses and equitable to its proposed partner countries as a partnership is supposed to be. Japan’s largest broadcasting organisation NHK observed that reluctance by India has led ministers from 16 Asia-Pacific nations to give up on their goal of reaching a broad agreement by the end of this year on tariff cuts.
The proposed RCEP, an ASEAN plus Agreement, specifically banks on the participation of India and China, as in any event, the ASEAN has its own body of rules for free flow of goods and services within its member states and the ASEAN also has existing free trade agreements with Australia, China, India, Japan, South Korea and New Zealand, all of which are at the negotiating table for the proposed RCEP. To have within one fold two big countries, India and China, expanse wise and population wise, who would doubly augment the coverage area of the Trade Agreement is what is seen in top circles as making the agreement crème de la crème, and therefore any dissonant utterances from India or China rock the negotiation boat. China is evidently throwing its might behind the proposed RCEP, as a counter blast to Trump’s imposition of tariffs on Chinese goods in the US. But other countries at the negotiation table and specially India are not so keen as the idea of mutually cutting down tariffs would mean that Chinese goods would keep flooding the market and destroying the agricultural sector.
A flagship programme flaunted by India’s present political leadership has been the Make in India Programme launched shortly after the last election. The proposed RCEP was being seen as a natural corollary with India attracting investment. However, with investment it also attracted services, thereby disrupting potential employment of local services, and use of land to generate employment. This was in addition to the fact that India’s export goods could not compete either in quality or in price with the cheap goods from China. So what use would India’s membership in the RCEP partnership be?
While the above issues continue to dog the negotiations and have prevented the RCEP negotiations from being concluded this year as per the original intent, local people and civil society groups, rights groups and trade unions have been flagging even more areas of concern. What would happen to access to affordable life-saving medicines, a right hard won through a legal battle, with data exclusivity, patent term extension and stringent Intellectual Property information, which would undermine the generic competition? What would happen to our rather robust labour, security and environmental legislation? Would it get compromised at the altar of lowering the prices of the goods to make them competitive in the RCEP countries markets? Is the heavy price to be paid for engaging in Investor-state dispute settlement when sued, worth it, after the experience of being the highest sued country in the proposed RCEP countries, where simply the expenses are dizzying, irrespective of a win or loss? Why do we not have access to the drafts of the text of proposed RCEP being negotiated? These are questions that have been poignantly raised, ever since the proposed RCEP began secretively hovering over the Indian firmament, and even reinforced at the 19th round of negotiations held in Hyderabad, where a large gathering of civil society groups, trade unions and community organisations thundered an effective NO to the trade agreement in its current form. The issues have since then remained unaddressed if reports on newspapers and websites of participating Governments are anything to go by.
India is in its election eve year, and therefore while kickbacks from foreign investors, as well as from local corporates who could possibly benefit from the proposed RCEP can seem lucrative, the Government can ill afford to ignore the consequences of providing the final seal for the RCEP Agreement. The issues around agricultural subsidies, the agitation on account of the plight of farmers, the quantum jump of dollar value against the rupee, the Any further aggravation would be a sure recipe for an election debacle. Which is why when the Indian Government talks the language of national interests..
Also, even as India played a critical role in shifting the time post for finally concluding the negotiations to 2019, it has floated the idea of a new approach to free trade agreements. “We will do a completely new approach toward FTAs (free trade agreements). … We are appointing two independent agencies, who will talk to all the stakeholders…it is a first major change. This will be a new template which will emerge for all future negotiations and we are working on it”, Commerce and Industries Minister Suresh Prabhu is reported to have announced at an event organised by India’s Consumer Electronics and Appliances Manufacturers Association.“So, while we need FTAs, we will make FTAs in a way that will also benefit India to begin with, and other countries also,” Prabhu told the gathering.
While public participation is certainly welcome, what remains to be seen is whether the present dispensation or any other that gets elected will be consistent with the position presently taken.
(Albertina Almeida is a lawyer.)
