Seems like China has climbed down from its tough stand over India’s withdrawal in the trade block RCEP, while New Delhi kept the doors open for negotiations with its Asian neighbours. “RCEP is open. We will follow the principle of mutual understanding and accommodation to negotiate and resolve those outstanding problems raised by India and we welcome an early joining by India,” Chinese foreign ministry spokesman Geng Shuang said.
India is worried that the trade agreement will open the floodgates of cheap Chinese imports and farm products from other nations in the block and will lead to closure of Indian factories and job losses. PM Narendra Modi had announced India’s decision to opt out of the trade bloc in Bangkok and China had reacted strongly at India’s decision to opt out. “In international engagement and relations, the doors never shut with anybody... If they make a sincere effort to resolve our concerns, to give us confidence and help us to balance this trade inequality, then I think every nation should talk to their friends,” commerce and industry minister Piyush Goyal told reporters on his return from the RCEP Summit in Bangkok. He made it clear that India wants other countries to open their markets, while ensuring that there was adequate protection from a flood of imports.
China said India will gain by signing the agreement. “If it is signed and put into implementation it is conducive for Indian goods entry into China and other participating countries. In the same vein, it will also help Chinese goods to enter the markets of India and other participating countries,” said Geng. “This is two-way and complementary (deal) and I should point out that China and India are both emerging major developing countries. We have a huge market of 2.7 billion people and there is a big potential in the market.”
RCEP is seen to be crucial for China as it is seen as an answer to Trump’s trade tantrums. For India, the bottomline is protecting the interests of farmers, dairy sector, small businesses and domestic industry, which experts believe have not benefited from the earlier trade pacts. Goyal said the government is now looking to fix the imbalances through a review of trade treaties with Asean and Japan. A decade after the Comprehensive Economic Partnership Agreement (CEPA) with Asean was signed, India has finally managed to convince the 10-member trade bloc to review the treaty. While Indonesia had offered to lower or eliminate duties on close to 95% of the items, just around half the products will see tariff elimination. In contrast, India had agreed to shift 74% of the goods to zero duty as part of the deal.