India decides not to join mega RCEP trade deal as key concerns not addressed

Ashwin

Agent_47
Staff member
Administrator
Nov 30, 2017
4,113
6,731
Bangalore
NEW DELHI: India on Monday decided not to join the China-backed Regional Comprehensive Economic Partnership (RCEP) trade deal, saying that its key concerns over the agreement have not been addressed, sources said.

"There will be no compromise on core interests. RCEP agreement does not reflect its original intent," top government sources said.

Sources added that India's stand is a mixture of pragmatism, the urge to safeguard interests of the poor and the effort to give an advantage to India's service sector.

"Our farmers, traders, professionals and industries have stakes in such decisions. Equally important are the workers and consumers, who make India a huge market and the third biggest economy in terms of purchasing power parity. When I measure the RCEP agreement with respect to the interests of all Indians, I do not get a positive answer. Therefore, neither the Talisman of Gandhiji nor my own conscience permit me to join RCEP," PM Modi said.


The Modi government had taken a tough stand over the mega Asian trade pact, pointing out several concerns — ranging from the base year for tariff reduction to protection against Chinese imports and opening up services sector by the other 15 countries.


Indian officials had made it clear that the Modi administration is unwilling to accept any deadline and wanted the country’s interests to be fully protected.


There was no credible assurance for India on market access and non-tariff barriers. India also had very valid concerns on keeping 2014 as the base year for tariff reductions, sources said.


Asserting that India will no longer give in to pressure from global powers on trade issues, the sources said that India is playing on the front foot this time.

India decides not to join mega RCEP trade deal as key concerns not addressed - Times of India
 

Guynextdoor

Banned
Dec 19, 2017
3,698
1,032
India
Right decision. Saarc countries are a bunch of sissies when it takes to taking a hard stand against Chinese on trade. This will only rubber stamp their decision
 

STEPHEN COHEN

Senior member
Dec 4, 2017
5,468
3,424
People Expect the Central Government to Protect and Advance India's National Interests , Always and Every time

That is what Governments are meant to do
 

Milspec

सर्वदा शक्तिशाली; सर्वत्र विजय
Moderator
Dec 2, 2017
1,854
2,399
United States
Is there anyplace I can read the entire document for RCEP.

Also why abandon it completely, why not keep arbitrating for a deal that is favorable?
 

randomradio

Senior Member
Nov 30, 2017
9,112
6,708
India
Is there anyplace I can read the entire document for RCEP.

Also why abandon it completely, why not keep arbitrating for a deal that is favorable?

No for the first one. And there's apparently a deadline for the second one.

That's why: Indian officials had made it clear that the Modi administration is unwilling to accept any deadline and wanted the country’s interests to be fully protected.
 
  • Like
Reactions: Ironhide and jetray

Milspec

सर्वदा शक्तिशाली; सर्वत्र विजय
Moderator
Dec 2, 2017
1,854
2,399
United States
I wonder what if India negotiated individually with the regional countries in the neighborhood, this one bill fits all type of attitude usually doesn't ends well especially when China in the midst. The trade agreements with Nepal cannot be of the same level as say a Thailand or Malaysia.
 

_Anonymous_

Senior Member
Dec 4, 2017
12,380
8,933
Mumbai
I wonder what if India negotiated individually with the regional countries in the neighborhood, this one bill fits all type of attitude usually doesn't ends well especially when China in the midst. The trade agreements with Nepal cannot be of the same level as say a Thailand or Malaysia.
That's one of the options but the only FTA's we've signed with Thailand & Malaysia have proven to be one sided ones against us. I've read somewhere that both these FTA's are up for review by the Commerce Ministry.

On a different note, I'm just watching an interesting discussion on Mirror Now on the massive pollution in N India and particularly Delhi. This has been on for some years. Now, I believe I speak on behalf of most members here when we believed that Modi was the magic bullet to solve basic problems, intractable problems.

Shekhar Gupta & others are of the view that our not signing the RCEP is a self defeating move. For if after nearly 3 decades of opening up the markets we haven't got our act in industry & agriculture, then when will we ever face the world with confidence in our own abilities to face up to world class competition?

He further opines that with the current trend of "MII," tarriff barriers, etc being erected we're back to the IG era of socialism, self reliance, import substitution, gareebi hatao, empty slogans, "hindu rate of growth ", etc .

Sometimes I've the sinking feeling he isn't wrong.
 

Milspec

सर्वदा शक्तिशाली; सर्वत्र विजय
Moderator
Dec 2, 2017
1,854
2,399
United States
That's one of the options but the only FTA's we've signed with Thailand & Malaysia have proven to be one sided ones against us. I've read somewhere that both these FTA's are up for review by the Commerce Ministry.

On a different note, I'm just watching an interesting discussion on Mirror Now on the massive pollution in N India and particularly Delhi. This has been on for some years. Now, I believe I speak on behalf of most members here when we believed that Modi was the magic bullet to solve basic problems, intractable problems.

Shekhar Gupta & others are of the view that our not signing the RCEP is a self defeating move. For if after nearly 3 decades of opening up the markets we haven't got our act in industry & agriculture, then when will we ever face the world with confidence in our own abilities to face up to world class competition?

He further opines that with the current trend of "MII," tarriff barriers, etc being erected we're back to the IG era of socialism, self reliance, import substitution, gareebi hatao, empty slogans, "hindu rate of growth ", etc .

Sometimes I've the sinking feeling he isn't wrong.

This idea of us being able to compete might have become an antiquated idea. Businesses will travel where they can make the most money, also businesses primary objective is profit maximization. For making a single cent advantage, Indian companies themselves will dump Indian manufacturers and pick Chinese, and with the Chinese manufacturers enjoying their own government sops and artificial exchange rates, it becomes very difficult for Indian companies to sustain their business. The prime example is HEG and Graphite industries. Indian steel manufacturers will routinely choose Chinese electrodes over Indian ones for saving a few cents. With our un-employment burdens, FTA's are a slippery slope to head down to.
 

_Anonymous_

Senior Member
Dec 4, 2017
12,380
8,933
Mumbai
Nitin Pai (@acorn) Tweeted:
1. Being out of RCEP cannot be a cause for celebration, nor is it diplomatic/negotiation success

2. Joining RCEP without structural economic reforms would have been highly risky too.

No simple answers here except that economic reforms are long overdue and even more urgent now ( )

Nitin Pai (@acorn) Tweeted:
India must now deepen trade with US, Japan, Singapore, Australia, Indonesia & others, on a bilateral basis. Even otherwise our geopolitical partners will be drawn into China’s geoeconomic orbit. ( )


Nitin Pai (@acorn) Tweeted:
At home, the Modi-Shah government will have to resist protectionist impulses. These will come in the garb of “nationalistic economic policies”. The risk of back to the 1970s is more real now than any time after 1992. ( )


@Milspec ; @Nilgiri
 

Milspec

सर्वदा शक्तिशाली; सर्वत्र विजय
Moderator
Dec 2, 2017
1,854
2,399
United States
Nitin Pai (@acorn) Tweeted:
1. Being out of RCEP cannot be a cause for celebration, nor is it diplomatic/negotiation success

2. Joining RCEP without structural economic reforms would have been highly risky too.

No simple answers here except that economic reforms are long overdue and even more urgent now ( )

Nitin Pai (@acorn) Tweeted:
India must now deepen trade with US, Japan, Singapore, Australia, Indonesia & others, on a bilateral basis. Even otherwise our geopolitical partners will be drawn into China’s geoeconomic orbit. ( )


Nitin Pai (@acorn) Tweeted:
At home, the Modi-Shah government will have to resist protectionist impulses. These will come in the garb of “nationalistic economic policies”. The risk of back to the 1970s is more real now than any time after 1992. ( )


@Milspec ; @Nilgiri
Interesting, Anywhere we can actually read the RCEP details?
 

Bali78

Senior member
Dec 26, 2017
1,043
1,095
USA
That's one of the options but the only FTA's we've signed with Thailand & Malaysia have proven to be one sided ones against us. I've read somewhere that both these FTA's are up for review by the Commerce Ministry.

On a different note, I'm just watching an interesting discussion on Mirror Now on the massive pollution in N India and particularly Delhi. This has been on for some years. Now, I believe I speak on behalf of most members here when we believed that Modi was the magic bullet to solve basic problems, intractable problems.

Shekhar Gupta & others are of the view that our not signing the RCEP is a self defeating move. For if after nearly 3 decades of opening up the markets we haven't got our act in industry & agriculture, then when will we ever face the world with confidence in our own abilities to face up to world class competition?

He further opines that with the current trend of "MII," tarriff barriers, etc being erected we're back to the IG era of socialism, self reliance, import substitution, gareebi hatao, empty slogans, "hindu rate of growth ", etc .

Sometimes I've the sinking feeling he isn't wrong.

He is wrong. We need to start walking before competing in a sprinting event. Since the FTAs signed before worked against us, it's time to introspect and fix the issues before signing the next trade deal which is heavily biased against us.
India did grow reasonably well in last 20 years without being a manufacturing heavyweight. What makes Mr Gupta think we are going back to Hindu rate of growth ??
The way robotics is growing most of the manual labour in manufacturing are going to be replaced by robots. So the typical move from agrarian economy --> manufacturing based economy --> service based economy, might not work in future. With heavy usage of robots, many of the manufacturing might move back to developed countries. So India might end up directly jumping to service based economy skipping the middle phase of manufacturing driven growth. Manufacturing will keep on growing in India, but it will not be the main driver for growth.

As far as agriculture is concerned, it's a dead end. There is no way a small farmer can earn enough money to move to middle class level. The cost of farming is continuously increasing while the price of farm produce is not growing at the same pace. It's not only India's problem. Even in US, farming has not been profitable since early 1980s when price of farm produce stagnated. My ex manager is from a farming family and his family is struggling to survive even with a 1200 acre farm!! What chance do India's farmer have with their tiny pieces of land?
The only way forward for Indian farmer is to stop farming and get re-skilled for manufacturing or services job. 30 years back 95% population of my village were dependent on farming. Now it's less than 50%.
 
  • Like
Reactions: _Anonymous_

STEPHEN COHEN

Senior member
Dec 4, 2017
5,468
3,424
That's one of the options but the only FTA's we've signed with Thailand & Malaysia have proven to be one sided ones against us. I've read somewhere that both these FTA's are up for review by the Commerce Ministry.

On a different note, I'm just watching an interesting discussion on Mirror Now on the massive pollution in N India and particularly Delhi. This has been on for some years. Now, I believe I speak on behalf of most members here when we believed that Modi was the magic bullet to solve basic problems, intractable problems.

Shekhar Gupta & others are of the view that our not signing the RCEP is a self defeating move. For if after nearly 3 decades of opening up the markets we haven't got our act in industry & agriculture, then when will we ever face the world with confidence in our own abilities to face up to world class competition?

He further opines that with the current trend of "MII," tarriff barriers, etc being erected we're back to the IG era of socialism, self reliance, import substitution, gareebi hatao, empty slogans, "hindu rate of growth ", etc .

Sometimes I've the sinking feeling he isn't wrong.

When USA ; the World' s most powerful
Economy can become protectionist and
Can Focus exclusively on " Weekly Job Numbers " , then there is Nothing wrong in Following their example
 

STEPHEN COHEN

Senior member
Dec 4, 2017
5,468
3,424
These Ivory Tower Journalists
Like Shekhar Gupta do not have to worry about Growth Rates and Jobs created
And Current Account Deficits

If our Domestic Economic Fundamentals get weakened , It will Only Strengthen Anarchist
Forces like CPM and Laloo Yadav / SP--BSP

RCEP is NOT the P5 of UNSC , it is Not the Global High table
 

randomradio

Senior Member
Nov 30, 2017
9,112
6,708
India
I wonder what if India negotiated individually with the regional countries in the neighborhood, this one bill fits all type of attitude usually doesn't ends well especially when China in the midst. The trade agreements with Nepal cannot be of the same level as say a Thailand or Malaysia.

Pretty much what Trump said. Bilateral FTAs are better than these huge trade blocs. Especially for a country like India that lacks trade related advantages.

We already have an FTA with ASEAN, Japan and Korea, and already none of these are in our favour. So it's better to work out these issues first.

ASEAN and the other countries already have FTAs with each other. The main goal of this group (primarily China) was to get India in, and now that's failed.