India has refused to join the Regional Comprehensive Economic Partnership (RCEP) agreement stating that its concerns have gone unheeded. India has asserted that the RCEP agreement does not reflect its original intent and it will not comprise on its core interests.
Sources: India decides not to join Regional Comprehensive Economic Partnership (RCEP) agreement. PM stands firm as key concerns not addressed; there will be no compromise on core interests. RCEP agreement does not reflect its original intent. Outcome not fair or balanced. pic.twitter.com/o058sJZnOn
— ANI (@ANI) November 4, 2019
According to the sources, Prime Minister Narendra Modi stood resolute on India’s demand on market access and tariff-related issues, adding key concerns were not addressed.
In his speech during the ongoing RCEP summit, Prime Minister Narendra Modi said the present form of the RCEP Agreement “does not fully reflect the basic spirit and the agreed guiding principles” or India’s concerns.
PM Modi further added, “When I measure the RCEP Agreement with respect to the interests of all Indians such as farmers, traders, professionals and industries, workers and consumers, I do not get a positive answer. It also does not address satisfactorily India’s outstanding issues and my own conscience permits me to join the RCEP.”
India refused to budge to the pressure applied by foreign powers to ink an agreement without addressing its trade issues. A source revealed that this time India placed paramount importance to its interests by stressing the need to address its concerns over trade deficits and need for countries to open markets to Indian services and investments.
According to news agency ANI, India’s core concerns include inadequate protection against import surge, insufficient differential with China, possible circumvention of rules of origin, keeping the base year as 2014 and no credible assurances on market access and non-tariff barriers.
India’s refusal to join the economic bloc comes after Commerce Minister Piyush Goyal strongly defending joining it. Countering the criticism from opposition parties including Congress, he had said that India had lost out in earlier FTAs with different countries during previous governments, and the RCEP will reverse that trend. He had asserted that the government will protect the interest of domestic industry and the people of India before entering into any free-trade agreement. But now as India’s demands were not met, India decided against joining the RCEP.
The planned free-trade agreement encompasses 10 member countries of the Association of Southeast Asian Nations (ASEAN) and six of the bloc’s dialogue partners – China, Japan, South Korea, India, Australia, and New Zealand.
If it comes into effect, the RCEP would have become the world’s largest free trade area, including half of the world population and account for nearly 40 per cent of the global commerce and 35 per cent of the GDP.
According to the sources, China is pushing for a swift inking of the agreement, as a part of its strategy to counter the United States on their ongoing bilateral trade-war. Now the rest 15 countries are likely to go ahead and sign the conclude the deal excluding India.