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India must convince industry of RCEP’s benefits: Australia

Australian High Commissioner to India Harinder Sidhu.

Australian High Commissioner to India Harinder Sidhu.   | Photo Credit: V.V. Krishnan

Australia is leading diplomats from various countries involved in the negotiations for the 16-member Regional Comprehensive Economic Partnership (RCEP) free trade agreement to convince India to commit to the deal by the end of the year. According to High Commissioner to India Harinder Sidhu, while there is “political will” that goes “right to the top” within the Indian government to go ahead with the FTA, the government’s task is to ensure Indian industry will support the decision.

“The task at hand, which I am sure the Indian government is doing, is to explain that what the RCEP will do for them is to open the door to multiple markets in one fell swoop,” Ms. Sidhu said in an interview to The Hindu, ahead of the RCEP ministerial talks in Beijing on August 2-3. Union Commerce and Industries Minister Piyush Goyal will attend the talks. 

A team of Indian trade negotiators are in Zhengzhou, capital of central China’s Henan Province, until July 31 for talks on concluding “substantial outcomes” by November 1, when the RCEP summit will be held. 

Over the past week, Mr. Goyal has held a series of consultations with various industry members, most of whom are ranged heavily against the deal. They expressed serious concerns, including worries over the flooding of the market with Chinese goods, and the lack of access for Indian services in the RCEP countries, which include the 10-nation ASEAN grouping and its six FTA partners — India, China, Japan, Australia, South Korea and New Zealand.

India must convince industry of RCEP’s benefits: Australia

Industry cautious on RCEP deal

Ahead of the 16-member Regional Comprehensive Economic Partnership (RCEP) Free Trade Agreement ministerial talks in Beijing on August 2 and 3, Union Commerce and Industries Minister Piyush Goyal met with representatives from various Export Promotion Councils in the engineering, auto, chemical, pharmaceutical, leather, agriculture, marine & food processing, dairy, copper, zinc, aluminium, textiles and gems sectors in separate meetings in Mumbai and Delhi.

‘Detrimental impact’

However, far from building consensus on the issue, industry sources at the meetings said they remain worried about the “detrimental” consequences of the RCEP agreement.

“From our past experience we have seen that whenever India has rushed into an FTA negotiation, trade deficits have always widened with nations after signing free-trade-agreements with them. The industry is apprehensive that the RCEP negotiations are also being hurried into without practising any caution which may be suicidal for India,” a member of the delegation explained.

Responding to the criticism of RCEP, the Australian High Commissioner to India Harinder Sidhu said it was the industry’s responsibility to use the FTAs well. Australia is leading diplomats from various countries to convince India to commit to the deal by the end of the year.

“Indian negotiators like any good negotiators can get the best deal in their own country’s interests. But the second part is that industry has to use the access that they gain from the agreement to extend their reach,” Ms. Sidhu said, adding that at the last round of RCEP trade negotiations in Melbourne, the Australian government was “reasonably optimistic that a conclusion on RCEP is achievable by the end of the year”.

Joining later

Managing industry concerns is one challenge for the Centre in the month leading up to the RCEP summit in Bangkok in November, which Prime Minister Narendra Modi will attend.

The other challenge would be if RCEP countries decide to go ahead without countries like India, and leave the door open for India to join at a later date, something Ms. Sidhu said would be a “deeply disappointing” outcome.

(With inputs from TCA Sharad Raghavan)

South Korea was added to the list of FTA partners

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Printable version | Aug 7, 2020 6:02:17 AM | https://www.thehindu.com/news/national/industry-cautious-on-rcep-deal/article28739731.ece

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