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07-Aug2018

Government to set up GoM to look into RCEP issues

In order to look into issues related to the proposed mega free trade deal -- Regional Comprehensive Economic Partnership (RCEP), the government will set up a four-member group of ministers (GoM). The RCEP bloc comprises 10 Asean group members (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam) and their six Free Trade Agreement (FTA) partners - India, China, Japan, South Korea, Australia and New Zealand. 

The development assumes significance as Indian industry and exporters have raised anxieties about the presence of China in the grouping, with which India has huge trade deficit. India had trade deficit with as many as 10 member countries, including China, South Korea and Australia, of the RCEP grouping of 16 nations which have been negotiating a mega trade pact since November 2012. The trade gap with China, Korea, Indonesia and Australia has increased to $63.12 billion; $11.96 billion; $ 12.47 billion and $10.16 billion in 2017-18. It was $51.11 billion, $8.34 billion, $9.94 billion and $8.19 billion respectively in the previous financial year, 2016-17.

Giving zero duty access to China would led to flooding of Chinese goods in the domestic market and impact the manufacturing sector. The mega trade pact aims to cover goods, services, investments, economic and technical cooperation, competition and intellectual property rights. Pressure is also mounting on member countries including India for early conclusion of the proposed free trade pact. Member countries are looking to conclude the talks by end of this year but a lot of issues are yet to be finalised including the number of products over which duties will be eliminated. Domestic steel and other metal industries want these sectors to be kept out of the deal. Under services, India wants greater market access for its professionals in the proposed agreement.


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