No joint statement will be issued, as certain key issues are yet to be resolved, even after two days of intense negotiations on October 11 and 12, according to one of the sources.
Trade ministers and negotiators of the 16-nation Regional Comprehensive Economic Partnership (RCEP) grouping failed to drum up a concensus on sticky issues at what was expected to be the last ministerial in Bangkok before a potential deal in November and the talks remained inconclusive, sources told FE.
No joint statement will be issued, as certain key issues are yet to be resolved, even after two days of intense negotiations on October 11 and 12, according to one of the sources. This has cast a shadow over a leaders’ summit, which was expected to be attended by heads of the 16 nations on November 4 to announce the RCEP deal.
Nevertheless, trade negotiators will meet again in Bangkok between October 14 and 19 to resolve the vexing issues relating to trade remedies, e-commerce, trade competition, trade in services, rules of origin and investment, said another source.
Commerce and industry minister Piyush Goyal, who represented India, tweeted after the meeting: “Participated in deliberations to promote trade & investment to achieve mutual economic growth, while safeguarding the interest of our domestic industry and farmers.”
While potential RCEP partners, including Singapore, are piling up pressure on India to conclude talks early, New Delhi wants to make sure the interests of its industry is protected and it doesn’t end up becoming a dumping ground of products, yet again (its free trade agreements with Asean, Japan and Korea have already widened its trade deficit).
Safeguards, particularly, remain a crucial part of India’s negotiations, as the government faces mounting domestic opposition to any RCEP deal. Already, scores of industries, from steel and pharma to textiles, have expressed fears of dumping by China, while the dairy industry, including players like Amul, have apprehended that subsidised dairy products from New Zealand would flood the Indian market.
After a bilateral meeting with Damien O’Connor, minister of state for trade and export growth of New Zealand, in Bangkok, Goyal tweeted: “We discussed ways to further deepen our bilateral cooperation & strengthen our trade & investment ties, while taking into account the concerns of our farmers and the dairy sector.”
Goyal also held a series of bilateral meetings in Bangkok with ministers of countries like Japan, China, Singapore, Malaysia, Australia and New Zealand.
A source had earlier told FE that India was planning to employ an “auto-trigger” safeguard mechanism for imports from not just China but also Australia and New Zealand to better protect domestic players from irrational spike in imports. This mechanism will typically come into play once imports of a particular sensitive product breach a stipulated limit. India is in negotiations to be able to invoke “auto-trigger” in case of 68 sensitive products for at least 8-10 years initially. Similarly, New Delhi wants the flexibility of a snapback — or transitional safeguard — mechanism for all RCEP members.
India and China on Saturday have pledged to work on reducing trade imbalance after talks between Prime Minister Narendra Modi and Chinese President Xi Jinping in Tamil Nadu. Both the sides decided to set up a high-level economic and trade dialogue mechanism to improve trade balance that is currently heavily tiled in favour of China. But the efficacy of any such mechanism can be tested only in the coming months.
India’s merchandise trade deficit with China stood at $53.6 billion in FY19, or nearly a third of its total deficit. Its deficit with potential RCEP members (including China) was in excess of $105 billion in FY19. Similarly, between April 2000 and June 2019, FDI from China stood at just $2.26 billion, or a meagre 0.52% of the cumulative inflows, according to the DPIIT data.
The RCEP is a proposed mega trade pact between the 10 Asean members, and India, Australia, China, Japan, South Korea and New Zealand. According to initial estimates, it accounts for 25% of global gross domestic product, 30% of trade, 26% of foreign direct investment flows and 45% of population.