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Opinion

Mixed signals from Hyderabad meeting

The nineteenth round of the Regional Comprehensive Economic Partnership (RCEP) Trade Negotiating Committee held its twelve-day protracted parleys in Hyderabad with Government of India hosting the event. RCEP is a proposed comprehensive regional economic integration agreement among the 10-ASEAN (Association of South East Asian Nations comprising Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam) and its six Free Trade Agreement (FTA) partners namely Australia, New Zealand, Japan, China, Korea, and India.

For India, RCEP is the best alternative in the face of a deadlock in the WTO Doha Round of trade talks that had remained suspended since 2012 which began way back in 2001 in the Qatari capital of Doha, the contiguous South Asian Association for Regional Cooperation (SAARC) not making any meaningful headway over the years and the failure of India or the prolonged negotiations still under way to be part of any major worthwhile regional trading agreements (RTAs) either nearer or far away in other continents. With the entry of a patently protectionist Donald Trump into the US Presidency and the outright rejection of the British voters to be part of the European Union (EU), the major western powers had lost their mojo and motives to bolster the free and fair world trading system that remained the hallmark of the post-war era and the ubiquitous trade growth and development it ensured across the globe.
Be that as it may, such a serious overture as RCEP involving as many as 16 nations across the Asian continent that cover far-off countries like Australia and New Zealand, besides China cannot be taken for granted. To a specific query in the Rajya Sabha in the ongoing session from a Congress member Wansuk Syiem (Meghalaya) as to whether a recent inter-sessional ministerial meeting of RCEP countries at Hanoi (Vietnam), New Delhi pleaded its inability to eliminate duties on 90 per cent of items for all members, especially China, the Minister of State for Commerce & Industry Nirmala Sitharaman said "India's negotiating position in RCEP takes into account both its interests and sensitivities in all areas of the negotiations, including trade in goods".
Fast-forward to the latest meeting at Hyderabad, a terse and tawdry press note issued by the Commerce Department on July 31 about the 19th RCEP meeting merely stated that "during the 19th round, a set of key elements for significant outcomes, envisaged to be achieved by the end of 2017, were agreed". In a prosaic tone with no substantive clarity that is characteristic of gobbledygook, the press note further mentioned that the meeting also "highlighted the need to have balanced discussions to progress negotiations across all areas and to continue to deliver outcomes".
That New Delhi has domestic compulsions not to rush through tariff cuts across products to the detriment of indigenous producers are quite well known and that had been the stated objective of successive Commerce Ministers of the country. Pranab Mukherjee as the Commerce Minister signed the Marrakesh Agreement establishing the World Trade Organizations in 1994 committing India to deeper tariff reductions in goods and bringing services under trade negotiations ever since globalisation and liberalisation mantra boomed in the 1990s under the Washington Consensus. Since then the integration of the domestic economy with the global economy involved making do with adjustment cost to the winds of radical changes that swept many an economy including India.
In the process, many a native economic activity withered jeopardising the livelihood security of legions of people the world over with India being no exception. In a swift-changing global economy, isolationist policies would not pay off, India too began the process of tariff cutting, though not on the scale of rich countries both in industrial and in agricultural goods. It is small wonder traditional Indian apples are no longer seen on the streets and one gets only waxed and shining apples imported from across the world in India. Still, India is being blamed as a spoiler in the ardent competitive game of catching markets with least barriers. No wonder the Thailand Chamber of Commerce and Vice Chairman, Board of Trade, Thailand Phairush Burapachaisri went on record in the sidelines of the Hyderabad meet that "the slow pace of RCEP parleys was worrying. We hear that while most RCEP countries have agreed to quickly eliminate barriers affecting goods trade, India is seeking more time to do so and that is delaying the negotiations".
New Delhi should respond to this charge even as it seeks easier norms on movement of professionals across borders for short-term work in 16 Asia-Pacific countries. But for the latter, the elephants in the room are Australia and New Zealand who do not like fresh inflow of skilled migrant workers into their countries, even as India has been contending that its demand for temporary relocation of professional and skilled personnel should not be construed and confused with permanent movement or immigration.
As no official details about the Hyderabad conclave of RCEP negotiations were available, leaked documents doing the rounds advert to the formation of an investor State Dispute Settlement mechanism and to include intellectual property (IP) as an investment. There is a general apprehension that treating IP as an investment would let private companies to raise investment disputes against the host country whenever they feel that the legal regime does not countenance them. These alterations could be set off by multinational companies and particularly the big pharma companies that had their hands tied before the laws of our land and the judiciary. Japan's insistence on the inclusion of this clause is no surprise as it is the third largest RCEP-investor country. The leaked IP chapter, according to Prof. Feroz Ali, IIT, Madras, reveals that both Japan and South Korea are mounting pressure to implement the WTO-mandated Trade –Related Aspect of Intellectual Property Rights (TRIPs)-plus regime in IP. Rightly, he cautioned that adhering to TRIPs-plus standards would be inimical to the interests of developing nations that have benefitted from generic competition and lower-priced medicines through the use of flexible arrangement in TRIPs such as stricter patentability criteria and the absence of data exclusivity provision.
Thus, in tariff liberalisation in goods sans services for more easier visa regime as also in the treatment of investment as intellectual property so as to secure proprietary rights for the investors in perpetuity, New Delhi is an unenviable predicament. Even as negotiations entail give and take, it is incumbent upon the negotiating authorities to take into confidence at least members of Parliament, including all political parties about how eventually the RCEP talks would pan out for the holistic development of the domestic economy and the millions of people who have a stake for sustainable living and their livelihood security in a country of India's continental size and diversity. IPA
(The views are strictly personal.)

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