India stays away from RCEP talks in Bali

06/02/2020    27

India stayed away from the latest talks on the Regional Comprehensive Economic Partnership, in a further sign that it may pull out of negotiations for the free trade agreement touted as largest in the world.

New Delhi's snub of the two-day chief negotiator meeting that started on Monday on the Indonesian island of Bali was confirmed by an official attending the talks. It comes three months after a summit in Bangkok, where all of the 16 participant countries, except India, agreed on "text-based negotiations."

The gathering in Bali had been dubbed "informal" to make it easier for the Indian contingent to take part. Issues such as market access -- some countries are requesting further negotiations because of a downturn in the global economy -- and whether to sign a deal without India's participation are on the agenda at the meeting.

Some countries, such as Japan, see that it is essential to include India to avoid creating an economic zone that could be dominated by China.

India refused to sign the agreement in Bangkok at the last minute because of concerns over its domestic industry and the potential of widening trade deficits with member countries, especially China. New Delhi fears that a deal without safeguards would make things worse, and RCEP is unpopular with many Indians, including farmers and owners of small and mid-size businesses.

India has, however, left the door open for a return.

In January, at the World Economic Forum in Davos, Switzerland, India's Commerce and Industry Minister Piyush Goyal said "if RCEP nations provide adequate protection against circumvention of product origin rules, adequate transparency is brought in the trading practices, if non-tarrif barriers can be addressed, there is scope for discussion."

The regional pact, with its full 16 member nations, would create a free trade bloc covering half the world's population and just over a third of global gross domestic product. Without India, population coverage falls to 30%, and GDP to just under 30% the worldwide figure.

Source: Nikkei Asian Review