Regional Comprehensive Economic Partnership (RCEP): Trade experts have hailed Prime Minister Narendra Modi’s decision to reject a comprehensive regional trade pact with ASEAN and five other countries including Japan and China. Prime Minister Narendra Modi, who was in Bangkok to participate in ASEAN, East Asia, and RCEP summits said, it was against the basic spirit of give and take. The situation was such that India had no other option, said Ajay Dua, former secretary of the ministry of commerce and industries while another foreign trade expert Abhijit Das said it was a bold and rational decision.
ASEAN and six other countries – India, China, Japan, South Korea, Australia, and New Zealand were engaged in negotiating a comprehensive free trade deal involving 16 nations in the Asia-pacific region. Top Indian negotiators were in Bangkok for the last several days to iron out any differences before Prime Minister Narendra Modi’s participation in the RCEP summit today. However, the government was facing strong domestic resistance from farmers and industry and trade representatives who were concerned about the dumping of cheap imports in the Indian market.
Prime Minister Narendra Modi, who arrived in Bangkok on Saturday, was supposed to take a political call on the issue of RCEP. He finally decided not to join the RCEP in its present form, saying that his conscience doesn’t permit this.
“The situation was such that India had no option, other countries discussed it for the last seven years and they decided to go ahead with the deal regardless of whether India’s concerns were addressed or not,” said Ajay Dua, who was associated with several trade negotiations including WTO as a secretary in the ministry of commerce and industries.
Given the stiff resistance within the country, trade experts were hopeful that the Modi government would not enter into any binding agreement in a hurry. Farmers organisation took out protest marches across all the major agricultural states against the RCEP late last month. The Congress party also opposed the free trade agreement. Congress working president Sonia Gandhi and former Union minister Jairam Ramesh had spoken against the deal.
“It was on the horizon and some of the RCEP countries were not serious in engaging constructively and addressing our concerns,” said Abhjit Das, head of the Centre for WTO Studies at IIFT.
“There was a considerable amount of concerns within the country that the agreement was not doing enough to address our concerns and nor did it contain strong provisions that would have protected our domestic industry and farmers from surge in imports,” he told Financial Express Online.
“I think India has done the right thing by not joining the agreement at this stage,” he added.
However, this is not the end of the road for the country if it wishes to join the proposed free trade agreement with ASEAN and others next year when it is expected to be signed.
“India will have the option to join the agreement at a later stage were its concerns were addressed by other trading partners in the RCEP,” said Professor Abhijit Das of Indian Institute of Foreign Trade.
However, it will require the consent of all other countries if India wishes to enter into the agreement at a later stage.
“All the 15 countries will have to unanimously decide whether they want to allow India in the deal or not,” added Ajay Dua.
