- The Leaders of the 16 Regional Comprehensive Economic Partnership (RCEP) member countries have deferred concluding negotiations of the proposed free trade agreement to 2019, as key member states head for elections and several market access issues remain unresolved.
- About RCEP:
- RCEP is a proposed trade pact OR mega regional free trade agreement being negotiated amongst 16 countries, comprising 10 ASEAN countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam) and ASEAN six FTA partners—Australia, China, India, Japan, Korea and New Zealand.
- It comprises 25% of global GDP, 30% of global trade, 26% of foreign direct investment flows and 45% of the population.
- About negotiations:
- Negotiations for following seven chapters have ben completed:
(i) economic and technical cooperation
(ii) small and medium enterprises
(iii) customs procedures and trade facilitation
(iv) government procurement
(v) institutional provisions
(vi) standards, technical regulations and conformity assessment procedures (STRACAP)
(vii) sanitary and phytosanitary (SPS) have been completed
- In the recently held 7th RCEP Inter-Sessional Ministerial Meeting “Ministers guided the negotiators to deliberate further on e-commerce, competition and investment chapters where consensus could not be reached during this meeting.
- Both in STRACAP and SPS negotiations, India managed to obtain balanced outcomes in the application of the Dispute Settlement Mechanism.
- India showed flexibility on the principle of ‘consensus’ in the Institutional Provisions Chapter which helped in its successful conclusion during the meeting.
- India’s issues:
- With little progress on services negotiations and mounting pressure from the domestic industry, India was reluctant for early conclusion of negotiations given the upcoming general elections early next year.
- The key contention for India in RCEP has been the presence of China with which it has a massive $60 billion trade deficit and Indian industry apprehends greater market access to China could harm key manufacturing sectors like steel and textiles.
- India is also worried about giving greater market access to other non-FTA partners like Australia and New Zealand.