RCEP: India steps aside

India has decided not to join the Regional Comprehensive Economic Partnership agreement as its key concerns have not been addressed, government sources said. They said that Prime Minister Narendra Modi stood firm as India’s key concerns were not addressed.

Fifteen Asian countries agreed terms on Monday for what could be the world’s biggest trade pact, they said in a statement, but India delayed its decision on joining because of significant differences over tariffs and other issues. The RCEP is backed by China and also brings in the 10-member Association of Southeast Asian Nations, Japan, South Korea, Australia and New Zealand.

“We noted 15 RCEP participating countries have concluded text-based negotiations for all 20 chapters and essentially all their market access issues,” the statement from the leaders said, to allow for signing next year.

“India has significant outstanding issues, which remain unresolved... India’s final decision will depend on satisfactory resolution of these issues,” it said.

According to government sources, there will no compromise on the country’s core interests and RCEP agreement does not reflect its original intent and outcome is not fair or balanced.

The key issues include inadequate protection against import surge, insufficient differential with China, possible circumvention of rules of origin, the base year remaining as 2014 and no credible assurances on market access and non-tariff barriers. The PM had said earlier that India remains committed to a comprehensive and balanced outcome of RCEP negotiations and seeks balance across goods, services and investments and also within each pillar.

India has been worried that the agreement, which requires the gradual elimination of tariffs, would open its markets to a flood of cheap Chinese goods and agricultural produce from Australia and New Zealand that would harm local producers.

RCEP is a proposed free trade agreement between the ten member states of ASEAN and six FTA partners.

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