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Don't rush to join largest trade bloc: Experts to government |
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NEW DELHI: Several trade experts on Thursday warned the government against rushing into the proposed Regional Comprehensive Economic Partnership (RCEP) agreement, which will create the world's largest free trade area, fearing the possible surge in imports from China.
Indian industry fears that Chinese imports will flood the market once the government agrees to allow near-zero duty import of several goods. This has prompted India to offer tariff reduction and elimination for only 4042% of the products compared to 85-90% in case of other FTAs. For long, the government has been wary of a pact with China but was virtually forced to engage through RCEP , fearing that by staying away it would not be able to participate in the discussions and might have to pay a high price for engaging later.
During a first-of-its-kind consultation conducted by the commerce department, there were also suggestions that RCEP was not as extensive as the Trans Pacific Partnership (TPP) agreement where 12 areas were included compared to eight for the largest trade bloc.RCEP -being negotiated by China, India, Japan, South Korea, Australia and Asean countries -is seen as a counter to TPP .
But some of the experts suggested that there was no need to enter RCEP , given that India already had an agreement with Asean members, Japan and Korea, with talks to finalise a deal with Australia at an advanced stage. Jayant Dasgupta, India's former ambassador to WTO, is learnt to have suggested that the government could contemplate an agreement with the US to counter the impact of TPP . But, there were also con cerns about inadequate preparation with former commerce secreatry Rahul Khullar saying Indian negotiators should not enter the room with a bargaining chip in their pocket.
Abhijit Das, who heads the Centre for WTO Studies, a commerce departmentfunded think tank, also pointed out that the negative list, which was prepared some years ago, was inadequate.
Another former commerce secretary G K Pillai also warned about the high stakes involved in FTAs. "Trade is war. We are not negotiating trading but fighting a sort of a war," a source quoted Pillai as saying.
Source : economictimes.indiatimes.com
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