India’s decision to leave the Regional Comprehensive Economic Partnership (RCEP) was not taken at the last minute, Commerce and Industry Minister Piyush Goyal told Parliament, in a statement, on Tuesday while defending the government’s decision to quit the 16-nation Free Trade Agreement (FTA) among the ASEAN and other countries.
In a heated exchange with Congress leader Jairam Ramesh and other Opposition members, who asked why the government had “pressed the pause button” at the last minute, Mr. Goyal denied that there had been a sudden change in policy on the accord, which had been negotiated since 2012, and indicated that the previous UPA government’s decision to join RCEP talks had been a mistake in the first place.
“Nothing happened in the past few days,” Mr. Goyal said. “Other countries knew what direction we were going in, and that if our concerns were not met, we would not stay in RCEP,” he said, adding that the final decision to pull out of the talks at the RCEP summit on November 4 was taken by Prime Minister Narendra Modi. “India should not have joined RCEP, it should have put a pause at the beginning itself,” Mr. Goyal contended when members from the Congress, Trinamool Congress, RJD, CPI and CPM sought to counter him about the timing of the decision.
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Sticking points
In his statement to the upper house, Mr. Goyal listed several reasons for the government’s call on RCEP, including the trade deficits India faces with 12 of the 15 RCEP partners it already has FTAs with, and blamed the UPA government for not negotiating the pacts more favourably for Indian companies. He said that the RCEP negotiators’ refusal to consider the services sector in the agreement was a major factor, as were concerns over rules of origin, non-tariff barriers, and the subsidy regime in some RCEP countries.
“A comparison of merchandise trade with these countries reveals that India’s trade deficit has steadily increased. For example, the trade deficit with ASEAN from 2010-11 until 2018-19 increased more than 4 times from $5.0 billion to $21.8 billion. In fact, the merchandise deficit with all the RCEP countries increased more than 9 times from $7.1 billion in 2003-04 to $65.1 billion in 2013-14,” Mr. Goyal informed the Rajya Sabha.
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