Breakthrough achieved in RCEP talks, claims India

Breakthrough achieved in RCEP talks, claims India

News:

1. Recently in 6^th RCEP Ministerial meeting India achieved a greater success under Package of Substantial Deliverables.

Important Facts:

2. 6^thRCEP Ministerial meeting was held in Singapore on 30 and 31^st August, 2018.

3. Major concerns of India for proceeding RCEP talks:

• India has certain reservations, as RCEP includes China, with which it has a huge trade deficit.
• India had argued that, ‘RCEP is not goods partnership alone, it’s an economic partnership and services should be included.
• Many RCEP members want India to commit to abolish duties on 92% of goods.
• India may have to scrap duties on 74% of goods from China in the long run.
• India needs a grace time period to address concerns by domestic industry and resolve their fears of dumping of cheaper products by China.

• For China, India would seek a longer period for removal of duties on goods as the domestic industry is apprehensive about the presence of the neighboring country in the grouping.
• No concrete progress is made on Preferential Trade Agreement pending for last six years.

4. Important Outcomes of the RCEP meetings are:

• Agreement on free trade and addressing the growing protectionism around the world.
• Investor State Dispute Settlement (ISDS) mechanism, but only for limited sectors.
• Of 16 RCEP countries, India does not have FTA with 3 countries namely China, Newzeland and Australia. Provision for separate negotiation to address this issue.
• Linkage between services and goods negotiation accepted.

5. Key demands of India accepted by members:

• 20 years grace period to eliminate tariff on key items from China, Australia and New Zealand.
• Differential tariff regimes for different country groups.
• Link services ‘inevitably’ with the goods.
• No additional commitment on intellectual property rights beyond the TRIPS Agreement which are already accepted at WTO.
• 6% margin for eliminating the tariff of 80% products depending on level of development of the other country as a part of the RCEP negotiations.
• Binding commitments for easier movement of professionals (called Mode 4 in trade parlance) in the region.

6. Regional Comprehensive Economic Partnership (RCEP):

• It is a 16 nation proposed Free Trade Agreement (FTA).
• It includes ten member states of Association of Southeast Asian Nations (ASEAN) (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam) and the six Asia-Pacific states with which ASEAN has existing FTAs (Australia, China, India, Japan, South Korea and New Zealand).
• An RCEP talk was launched in Phnom Penh in November 2012 for an agreement over the removal of customs duties on the maximum number of products traded between the member countries.