India on Tuesday said it is open to joining the China-led Regional Comprehensive Economic Partnership (RCEP) trade deal if all its concerns are met, while maintaining that its decision to stay out is final for the moment.
A day after rejecting the world’s biggest free trade pact, India also signalled its readiness to renew negotiations on a long-pending free trade agreement with the European Union.
“For the present, it is the final decision that we are not joining RCEP," trade minister Piyush Goyal told reporters.
“But if all our demands are met, that will open up opportunities for our goods, services and investments in this region and balance the trade deficit that India is suffering without allowing India to become the dumping ground for other countries, then every government is always open to discussions and negotiations."
India on Monday decided against joining the RCEP trade deal, holding that it did not receive any credible assurance on market access and non-tariff barriers. The other 15 members, however, decided to go ahead and sign the trade deal next year. In a joint statement, RCEP members said all RCEP participating countries will work together to resolve the outstanding issues raised by India in a mutually satisfactory way.
Goyal said in international engagements, countries always talk to each other. “The doors are not shut for anybody. If the 15 RCEP nations make a sincere effort to resolve our concerns, to give us confidence and help us to balance the trade inequality which Prime Minister has raised, then every nation should talk to their friends. We have not become enemies of each other."
Negotiations for RCEP, which included the 10 member-states of the Association of Southeast Asian Nations (Asean) and six free trade partners—China, India, South Korea, Japan, New Zealand and Australia—began in 2012. Indian industry was, however, apprehensive that the deal would lead to a surge of cheap imports from China, with which India already has a trade deficit of over $50 billion.
Asked why the government did not withdraw from the talks earlier, Goyal said a decision taken by an erstwhile government on an international platform cannot be changed or reversed suddenly just because of a change of government, referring to the decision of the Manmohan Singh government to join the RCEP talks in 2012. “When our government came in, we were less enthusiastic than the previous commerce minister, but that does not mean we can close the discussions. Because India stood its ground, negotiated hard and strong for national interest, the negotiations could not get completed (by 2016 as envisaged earlier)," he added.
Ruling out that India may be marked as a deal-breaker for exiting RCEP at the last moment, Goyal said India has not exited the pact in an acrimonious manner. “We have consistently stood our ground on these issues and every body was clear that India is willing to talk. Therefore, I don’t think there is any point of a tag of deal-breaker. There is no last minute issue. The onus is on other nations to respond to India’s concerns," he added.
Asked about the lessons learnt from the RCEP negotiations, Goyal said India should never finalize a trade agreement in a hurry, citing the examples of the 2009 and 2011 pacts with Japan, South Korea, Malaysia and with Asean countries. “Trade discussions and negotiations should allow enough time and enough considerations so that they are done carefully keeping the best interest of our people and our national interest in mind," he added.
On a question regarding the long-pending India-EU free trade agreement, Goyal said he believes India should engage in an FTA with the EU. “These are countries where India has a number of products which can be exported. Currently, there are no discussions going on the FTA. We have now been approached by several EU countries to once again consider negotiations with the EU. A new EU commission is expected to be in place soon. After that, we will once again start discussing with them to see if there is a potential scope for a fair and balanced FTA," he added.
Richard Rossow, senior fellow at the Centre for Strategic and International Studies, said he is not surprised by India’s decision. “India has trade deals with all of Asean, Japan and Korea. If India’s trade imbalance with China worsened, (it) would augment India’s deepening anti-trade instincts. As others have noted, let this trigger bigger domestic reforms," he tweeted.