Delhi under pressure from SE Asian nations to speed up RCEP talks

Ahead of the  ASEAN-India commemorative summit, New Delhi on Monday came under pressure from the South-East Asian nations to soften its stand in negotiations for the 16-nation Regional Comprehensive Economic Agreement.

The trade ministers of the South-East Asian nations attending the  ASEAN-India Business and Investment Meet and Expo called upon New Delhi to ease its stand so that the RCEP negotiations could be concluded this year.

New Delhi, however, remained non-committal with Commerce Minister Suresh Prabhu saying that India would continue to seek a balanced outcome of the negotiation on the RCEP, covering not only goods, but also services and investment. He, however, said that India would work with  ASEAN  and other proposed RCEP members for "early conclusion" of the negotiation.

The Ministry of Commerce and the Ministry of External Affairs are holding the  ASEAN-India Business and Investment Meet and Expo in New Delhi in partnership with the Confederation of Indian Industries. It is being held as a prelude to Prime Minister Narendra Modi's meeting with leaders of all the 10 South-East Asian nations.

Modi and the South-East Asian leaders will on Thursday hold a special  ASEAN-India summit to mark the 25th anniversary of New Delhi's partnership with the 10-nation bloc.

"I believe India will not disappoint  ASEAN. I believe India will stand with  ASEAN  to conclude the negotiation for the RCEP this year," Enggartiasto Lukita, Minister of Trade of Indonesia, said, speaking in the inaugural ceremony of the conclave.

Lim Jock Seng, Second Minister of Foreign Affairs and Trade of Brunei Darussalam, too echoed him, tacitly nudging New Delhi to help expedite the negotiation.

The RCEP is a proposed agreement between the  ASEAN  nations – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand, Vietnam and the Philippines – and the six other countries, which already have separate trade deals with the 10-member South East Asian bloc.

Prabhu, who also spoke in the conclave, said that New Delhi was of the view that the RCEP would be a logical extension of the Act-East policy of India. He also said that New Delhi recognized the centrality of the  ASEAN  in the RCEP negotiations. "It is important to address the sensitivity and aspirations of all the member-nations to add momentum to the negotiations," he said.

India has been resisting pressure from China and the other RCEP nations to bring down or eliminate the tariff on 90% of the traded items.

New Delhi is ready to give higher tariff concession to 10 South-East Asian nations as it already has free trade agreements in both goods and services with the  ASEAN. India, however, is reluctant to open up its market so much for China in view of the growing deficit in its bilateral trade with the communist country. New Delhi is cautious about committing higher tariff concession for Australia and New Zealand.

India is also concerned over the reluctance of the other countries to make commitments for substantially opening up the services sector under the proposed RECP agreement.

"We would all aim to achieve an RCEP that results in the realisation of the potential of the three pillars of RCEP – goods, services and investments and in a manner that is balanced and collectively satisfying," Prabhu said in an apparent response to  ASEAN  trade ministers' call to New Delhi to help speed up the negotiations.

If signed, the RCEP would cover 16 Asia-Pacific nations with a total population of 3.4 billion people and a total Gross Domestic Product of $ 49.5 trillion. The proposed deal seeks to bring together the economies that account for 39% of the world's GDP.

The negotiation for the RCEP was launched in November 2012, as a potential counterweight to the proposed Trans Pacific Partnership, which was initiated by the US, but excluded China and India. The negotiation for the TPP, however, suffered a setback earlier this year after the US withdrew from it soon after the change of guard in Washington.

Prabhu on Monday admitted that the negotiations on the RCEP had been rather slow, but added: "It is only natural given the diversity of the economies of the member countries."