Trading bloc to India: cut tariffs or exit FTA talks

April 20, 2016 12:00 am | Updated 05:32 am IST - NEW DELHI:

Member countriesof RCEP issueultimatum

India has been told to either agree to eliminate tariffs on most products quickly or leave the talks on the proposed Free Trade Agreement (FTA), being negotiated by the Regional Comprehensive Economic Partnership, the trading bloc comprising 16 Asia-Pacific countries.

Sources in two ministries told The Hindu that the other RCEP members have issued this ultimatum being irked by what they perceive as New Delhi’s “obstructionist, defensive and half-hearted approach” that is “delaying” the conclusion of the talks. They said the apprehensions were voiced at the last round of negotiations in February in Brunei, adding that the 12th round of RCEP talks slated for April 23-29 at Perth in Australia could be a “turning point” in the negotiations with India.

In particular, trade negotiators from the other RCEP members, comprising the 10-member ASEAN bloc, and China, Japan, Australia, South Korea and New Zealand were upset over India’s protectionist stance, “focusing only on the export of manpower” and not on liberalising trade in goods and other services, as well as investment.

Matters could come to a head as officials in the ministries of External Affairs and Commerce are expected to seek a clear direction from PM Narendra Modi on whether or not India should be part of the RCEP. The PM, they said, has been concerned over the lack of progress in India’s negotiations on all the major FTAs including the RCEP, and with the European Union (EU), Australia and Canada. “The PM will have to take a strategic call,” on whether the government wants to go ahead with all these FTAs, said a senior official.

The official also said that RCEP members must acknowledge India’s interest in the RCEP as a key component of its ‘Look East’ policy. “We have maintained that we have made very substantial offers and we are seriously negotiating. We cannot be brushed aside as if we were non-serious about it,” the official said.

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