Meeting with Regional Comprehensive Economic Partnership (RCEP) trade negotiation committe
Mr Balgi attended the meeting organized by FICCI for Indian business associations to interact with representatives of RCEP countries.
Following are his brief deliberations:
- 1. Mr. Manab Muzumdar, Assistant General Secretary of FICCI presented that India is keen to participate in economic cooperation processes related to Trade in Goods and Services, planned in RCEP. RECP envisage regional economic integration, leading to the creation of the largest regional trading block in the world, accounting nearly 45% of the world’s population with a combined gross domestic product of $ 21.3 trillion. However, the Indian Industry is handicapped with its own inefficiency of infrastructure, and, capital costs, hence is not ready to take on foreign competition without present customs duty shield on imports. Customs duties on imports shall be reduced gradually. Also requested for concluding the trade negotiations in goods and services simultaneously. In past FTA negotiations, negotiations moved sequentially creating lot of stress for negotiators.
- 2. Mr. Ajit Ranade of Birla Group and Mr. Sapan Ray of RIL spoke of present need of employment generation for our people. Stressed that we all have to work for economic uplift of near 300 million people below poverty line. Therefore, other nations to consider this input while demanding trade concessions.
- 3. Representative from SIAM spoke on how GoI facilitated investments by foreigners for domestic manufacturing of automotive, which has benefited in generating domestic employment, and, economic benefits to investor by providing domestic market share, and, opportunity to export the produce, taking advantage of low cost of production. Similarly Other countries in RCEP should also create conducive environment for Indian investors.
- 4. On PMMAI’s turn, I presented as follows:
"We fully support RCEP initiative. As we understand it is a cooperation between countries for economic participation in regional trade development. It is not for free trade agreements but establishing cooperation for facilitating trade in goods and services and investments. At present customs duty applicable to some of the plastics machinery has been brought down to Zero in FTAs with ASEAN, Korea and Japan. This situation has made us lose some market share on price consideration to imports. Now we look for help. We import some technology component used in our machines from Japan, Taiwan, Korea and China. We look for these countries to invest in India for producing parts locally so that we get cost advantage. These investments will generate employment for our people. Today, industry at large has assumed responsibility for creating employment for our people, so that we improve economic conditions of 300 million people living below poverty line.
Once RCEP is concluded can we take it as an overall umbrella agreement superseding earlier FTAs ?.
- 5. Chairman of the session left it for decision of the countries who have entered into FTAs.
- 6. Steel manufacturers association expressed that they do not want to participate in RCEP as some member countries are heavily subsidizing steel production. Some 6 Indian steel producers are of world ranking on quality and costs, but not in position to sell products to countries in RCEP.
- 7. Similar view was expressed by Alkali producers. Japan and India are the only countries producing Alkali chemicals without using Mercury in process.
- 8. Responding to representations by Indian Industry Associations few members of RCEP group expressed following views:
- 1) Malaysia and Philippines expressed that FTAs have not benefited their countries.
- 2) Japan considers India as destination for investments.
- 3) New Zealand wants to maintain FTAs with specific countries for specific products in addition to participating in RCEP, which will be broader agreement.
- 4) Australia – looks for regional supply chain, value chain and international business network. Wants to maintain FTAs (recently signed one with China).
- 5) China – Agrees that RCEP countries are not at the same level of development. However, trade in goods, services and investment have to move simultaneously.
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