New Delhi: The Regional Comprehensive Economic Partnership (RCEP) negotiations seem to have hit a roadblock with member countries unwilling to accept India’s demand for greater liberalization in services.
In turn, India has taken a tough stand by refusing to reveal its final tariff concessions in goods. “Our stand is, we want a balanced outcome. Other countries want us to take our tariff liberalization up to 92% which we cannot do. There is still no agreement on modalities for tariff reduction and limited deviation (in tariff liberalization for some countries) that we have been advocating," a commerce ministry official said, on condition of anonymity.
“We are under no pressure to quickly conclude the deal. We will negotiate what is important for us and on our terms. We are ready for give-and-take but cannot agree to a deal where we get nothing in services. There has been no substantive progress in services negotiations," the official added.
India had earlier conveyed to member countries that provided there is meaningful progress in services and investment, India is ready to show flexibility on the goods side with tariff reduction on more items.
India also wants to give different level of tariff cuts to countries like Australia, New Zealand and China with which it does not have free trade agreements.
ALSO READ: Caught between the dragon and the elephant
The next round of negotiations as well as the trade ministers’ meeting is scheduled to be held in May in the Philippines. India has little to gain in getting market access in goods in other countries due to its poor infrastructure and weak manufacturing base, but it thinks it has an upper hand in services negotiations.
India hopes to acquire market access for its burgeoning skilled professionals and easier visa regimes in the RCEP member countries.
However, liberalization of trade in services remains a contentious issue for other member countries, with most showing reluctance to open up their labour market. Speaking at an event organized by the Research and Information System for Developing Countries on Monday, commerce secretary Rita Teaotia said, at RCEP, in terms of investments and services, India was able to make far deeper offers and proposals than most of the counterpart countries.
“While we continue to be open, we need to find new markets. There are legitimate aspirations of Indian exporters," she said.
Teaotia said, while countries discuss all aspects of goods liberalization, when it comes to services liberalization, they do not want to touch the issue of movement of professionals—an area India is keen on.
Started in May 2013, RCEP comprises the 10 economies of the Association of Southeast Asian Nations (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam) and six of its free trade partners (Australia, China, India, Japan, New Zealand and South Korea).
The grouping envisages regional economic integration, leading to the creation of the largest regional trading bloc in the world, accounting for nearly 45% of the world’s population and with a combined gross domestic product of $21.3 trillion. The regional economic pact aims to cover trade in goods and services, investment, economic and technical cooperation, competition and intellectual property.