RCEP countries reduce demands in effort to get India to rejoin
June 3, 2020: In an astonishing backdown, the remaining 15 states negotiating for the Regional Comprehensive Economic Partnership reportedly told the Indian government that it could defer any stronger market access commitments, and was welcome to sign the draft agreement in November 2020.
“The deferral means that India does not need to worry about RCEP’s impact on the broadening of its trade deficit with China and other member countries when it signs the RCEP agreement,” a diplomat told The Hindu BusinessLine.
Earlier reports indicated that India had to respond by May 15, and that it was asked to make some more limited market access offers. The Indian government apparently did not respond by that deadline.
In February 2020, New Zealand offered to explore a bilateral arrangement with India if by the end of 2020 it had failed to return to the RCEP. And in March, there was a suggestion that the dormant India – Australia free trade agreement talks may be revived.
The RCEP 15 is made up of the 10-member ASEAN, China, Japan, Australia, South Korea and New Zealand, and they have declared that they will sign the agreement in November 2020, with or without India.
The Modi government declared it would not sign the agreement in November 2019, citing fears of a huge trade imbalance with China, a preference of its ‘Make in India’ policy, and under pressure from various segments of the Indian industry, dairy and other farmers’ groups as well as civil society groups.
Japan and Australia have led the effort to coax India back to the negotiating table.
Australia’s FTA talks with India stopped in 2015 over disagreements about Australian market access to India. Prime Minister Morrison is having a virtual summit with India’s Prime Minister on June 4 to discuss trade, security and other issues.