‘India will not yield on services at RCEP trade talks’

Source: The Hindu BusinessLine| May 1, 2016

Detailed studies are on to analyse usefulness of pending FTAs: Sitharaman

NEW DELHI, MAY 1:  India will stick to its demand for freer movement of workers as part of the Regional Comprehensive Economic Partnership (RCEP) being negotiated between 16 countries.

While only China is standing behind India on the issue, New Zealand and Australia have agreed with some aspects of the country’s proposal.

“We are not going to yield. Services is our primary area of interest in the ongoing RCEP negotiations,” Commerce Minister Nirmala Sitharaman said at a consultation meeting on FTAs organised by research body RIS on Sunday.

RCEP countries, including the 10-member ASEAN, South Korea, Japan, China, India, Australia and New Zealand, held their 12th round of consultations in Australia last week.

“India strongly pushed its interests in investments and services at the round and because of its insistence RCEP members have started evaluating offers made in both Mode 3 (investments made by service providers in partner countries) and Mode 4 (movement of workers),” said Arvind Mehta, Additional Secretary, Ministry of Commerce.

However, Sitharaman is candid when she says that India expects to gain relatively less in the area of goods because of lower duties in many member-countries. But, it will use it as a bargaining chip to gain concessions in services.

Most RCEP members want tariffs on all goods to be reduced to zero within a 10-year time-frame, in line with the ambitious Trans Pacific Partnership (TPP) agreement between the 12 Pacific Rim countries led by the US. India has to take a call on what will be the “overall de minimis red line”, pointed out Mehta.

Delay in FTA

Decisions on whether it would agree on tariff cuts on all items or press on longer time-frame for implementation need to be taken.

On free trade agreements, the Minister said that it might appear that India was moving slow on a number of FTAs, the fact was that detailed studies were on to analyse their usefulness for the country and the apt negotiating stand.

“There is so much work going on. We will certainly move forward (on the FTAs) when we are sure. We do not deserve criticism,” she said.

On why there was a delay in the FTA with Australia despite the Australian trade envoy claiming that it had offered the best terms to India compared to its other FTA partners, the Minister said such things were said to put pressure on India to relent to the trade partner’s terms.

“I would say sledging happens not just on the cricket field,” she said, without elaborating on where things were stuck.

Commenting on a possible over-valued Rupee affecting India’s exports, Sitharaman said that the Commerce Ministry wanted it to be de-valued, but was not involved in the debate.

“It is an important issue and the Commerce Ministry not just feels left out but also helpless,” she said.

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