As I Start
to Pen down my another Article on recently held ASEAN summit at Bangkok,
wherein our PM Modi deferred from signing the RCEP deal, before I give a
detailed analysis, I would like to quote some concepts of Arthasastra by Chanakya, His concept of objectives for a king Proposes
“Economic Performance” as key Governing objective & highlighted the
Constituents of Economic Performance as—“Efficiency, Growth, Adaptability,
Acquire, Consolidate, Expand, Prosper.”
visit to Bangkok –Shoring up India’s Trade & Security ties with the members
of the Association of South East Nations in the backdrop of China’s rising
economic & Military influence over the region is expected to be the focus
of PM Modi’s Summit-level engagement with leaders of the powerful bloc during
his three-day Visit from Saturday. The Biggest talking point in the ASEAN
Summit, Nonthaburi, a vibrant city North of Bangkok, however, has been the
final leg of negotiations on the Regional Comprehensive Economic Partnership
(RCEP). The RCEP Deal if it would have been final used, and then this deal will
facilitate creation of the biggest free-Trade regions of the world. Besides
attending ASEAN & RCEP summits, PM also attended East Asia Summit w2hich is
expected to review the evolving security scenario in the region besides
deliberating on ways to deal with the threat of Terrorism & Radicalization. The Annual ASEAN Summit which is a grouping
of 10 Influential countries took place amidst aggressive China’s behavior, in
the disputed South China Sea as well as in the Indo-Pacific region. The
Powerful grouping will have separate summits with its dialogue Partners like
India, the US, Japan, Russia, & China.
between India & ASEAN have been on an upswing in the last few years, ASEAN
Summit’s focus was more on Trade, Investment related issues, and leaders at the
Summit delved into deeper issues relating to Maritime Security, terrorism,
non-proliferation, & Migration. Apart from 10 Member ASEAN members, East
Asia Summit included like India, China, Japan, Korea, Australia, New Zealand,
US & Russia. In both the ASEAN & East Asia Summit, both sides explored
ways & means of furthering Trade & Investment ties. The ASEAN region
along with India together comprises combined Population of 1.85 Billion People,
which is one-fourth of the Global Population & their combined GDP has been
estimated at over $3.8Bn.
Now let me tell you what is RCEP?
2012 as a routine harmonizing of agreements between members of the Association
of South East Asian Nations, or ASEAN, turned into a deal creating potentially
the world’s biggest free Trade Bloc. The Regional Comprehensive Economic
Partnership to give its full name is aimed at strengthening trading ties with
China, & others with ASEAN members. Broadly speaking, it would lower
tariffs& other barriers to the Trade of goods among the 16 countries that
were in, or had existing trade deals. But that’s now to 15 Nations, Yes India
Pulled out in November saying it wanted to protect service workers & farmers.
There were also worries the country would be flooded by cheap goods from
China.Pm Modi had pushed the other Nations to address concerns over deficits
& also to open their Markets towards Indian services & Investments.
Will India Incur a Loss for not signing RCEP
have been the 3rd biggest Economy in the RCEP, so Yes, On the Other
hand, China has been seeking to tie up the deal expeditiously as China faces a
slowdown from a Trade war with the U.S. It is also looking to further integrate
with regional Economies just as the Trump Administration urges Asian Nations to
shun Chinese Infrastructure loans & also 5G Technology. But China gave
India also the option to come back aboard whenever it’s ready, which according
to me India should never indulge into at all, we should never think on those
lines at all.
How different is RCEP?
TPP & other US led Trade deals, the RCEP Deal won’t require its members to
take steps to liberalize their economies, protect labor rights, &
environmental standards & also to protect Intellectual Property. According
to US Commerce Secretary Wilbur Ross, it’s a “Very low-grade treaty” that lacks
the scope of the Trans-Pacific Partnership or TPP
What Happened to TPP?
the CPTPP, or Comprehensive & Progressive Agreement for Trans- Pacific
Partnership, signed duly in March 2018, it’s already in force for seven of the
11 signatories. They decided to press on after Trump signed an executive order
in 2017, shortly after coming to office, withdrawing the US. saying he wanted
to get fairer deals.
Which countries are on which side?
Nations –Australia, Brunei, Japan, Malaysia, New Zealand, Singapore &
Vietnam – Participated in deals for Negotiations. The US, Canada, Chile, Mexico
& Peru are TPP-only negotiators, while RCEP—only countries other than China
are Cambodia, India, Indonesia, Laos ,Myanmar,
Philippines, South Korea & Thailand. The US hasn’t been deliberately
excluded from the RCEP. To join, it would first need to reach free-Trade
arrangements with ASEAN, and then apply to join.
Why India Rejected RCEP Deal?
hour Rejection, of RCEP Deal, came as India battled slowing of Manufactured
& Consumption. The Pact would have increased India’s access to other Asian
Markets, but New Delhi feared its Domestic Industries would be hit hard if the
country was flooded with Cheap Made-In-China goods. Farmers, Businesses Hailed
PM Modi’s decision to opt out of a sprawling Asiaan Trade Pact, with the
country’s largest Diary Producer Amul
thanking the Premier for ”Supporting Livelihoods”. NewDelhi’s 11th
hour rejection of the RCEP which was meant to account for 30%, of Global
GDP& Loop in half the world’s population—comes as India battles slowing
Manufacturing & Consumption. This pact would have increased India’s access
to other Asian Markets; But New Delhi feared its domestic industries would be
hit hard if the country was flooded with cheap Made-In China Goods,
Particularly in key employment sectors such as Agriculture & Textiles. In A
Tweet, Amul Applauded PM Modi’s exemplary leadership & Support to Dairy
Farmer, who would have been exposed to more competition under the RCEP?
of 36Lac co-op milk Producers of Gujarat, we wish to thank Hon.PM @narendramodi
for his exemplary leadership & support 10 crore milk producer families of
India. Your Vision of supporting their livelihood will help doubling their
incomes & make India stronger.
Khandelwal, Secretary General of the leading lobby group, CII Traders (CAIT),
released a statement to ATP warning that the deal would have allowed Chinese
Manufacturers to overwhelm “the Indian Markets with Made in China Products at
very low prices… thereby creating a disequilibrium”.B.M.Singh, convenor of the
All India Kisan Sangharsh co-ordination Committee, said the rejection of the
deal was a “huge victory for Farmers”. “We should not go for open agreements
like the RCEP simply because we can’t compete with other big countries”. “It is
like throwing someone who is 25 Kg (55Pounds) into a boxing ring and asking him
to compete with an opponent weighing 100Kg”.
also cautioned New Delhi, which has a long
supply chains, this decision appears for the moment to make it harder to
boost Manufacturing in India”, the Council on Foreign Relations Senior Fellow
Alyssa Ayres said.
Central issue for the Indian Government isn’t in the wording of a trade deal,
but in the competitiveness of the Indian Economy.” Ayres added in a blog post
underlining the need for New Delhi to undertake further Reforms to Kick start
growth. India’s decision is a big blow to the deal, which now includes all 10 Association
of South East Asian Nations Plus China, Japan, South Korea, Australia & New
Zealand—but not the United States. The Remaining members are reviewing the deal
7 the Deal will be signed next Year.
Causes that led to Say No to RCEP Deal—
One of the
most important factors was that there was no assurance on getting access to
markets like China while the trade pact would have opened up India’s Market.
Opposition to the Possible signing of the Deal came from Swadeshi Jagran Manch
(SJM) & Bharatiya Kisan Sangh (BKS), the two affiliates of RSS. India
decided not to join the RCEP Trade Deal saying it didn’t get any “Credible
assurance for India on Market access & Non-Tariff barriers”. PM Modi- led Government,
in the run up to the deal was under intense Pressure from affiliates of RSS,
opposition parties & also small-scale Industries too. But our PM Modi who
believed in SabkaSaath Sabka Vikas AUR Sabka Viswas made him not to enter into
this RCEP Deal for the Sake of Nation’s welfare Point of view, thereby
safeguarding Nation’s interest.
decision duly has its own Political significance too, coming in the backdrop of
growing clamour over the State of the Economy as such. The Development comes
into just a fortnight after ruling BJP below expected performance in the State
Polls, 7 less than two weeks ahead of the crucial winter session of Parliament.
One of the Key factors that played a role in the decision was that there were no
assurances on getting access to markets like China while the Trade Pact would
have opened up India’s Market, a person familiar with the RCEP talks said.
There was also lot of concerns duly expressed by industry experts, that joining
RCEP would have meant incurring a greater Trade deficit with China which has
greater competence in the Manufacturing Sector as such. SJM believes that RCEP
deal would have undone lot of good work done by NDA led By PM Modi.in last six months.
The agreement would have killed the Make in India, Digital India, Skill India,
& various other avenues of Job creation. They also requested to review the FTA
(Free Trade Agreement), CEPA done with Japan, South Korea, & other
Countries”. Ashwani Mahajan, National Co-convenor of SJM said in a Press Note.
Soon after the decision, top leadership of the Union Government said the move was
made keeping National Interest in mind & that it would benefit farmers particularly,
“India’s decision to not to sign RCEP is a result of PM Narendra Modi’s strong
Leadership & Unflinching resolve to ensure National Interest in all
circumstances. It shall ensure support to our farmers, MSMEs, Dairy &
Manufacturing Sector, Pharmaceutical, Steel & Chemical Industries, and
“Home Minister Mr.Amit Shah Tweeted.
C-Congress-Corruption— charge was led by its
President, Mrs. Sonia Gandhi, who, said that Indian Economy was under Siege,
& signing of RCEP deal will be a body blow, but they forgot the fact it was
under their regime the Influx of Chinese goods into the Indian economy flourished especially in 2009, leading to
Trade Deficits, A Political Hypocrite. The BJP Party on the whole welcomed this
excellent decision of the move of signing out of the RCEP Deal.
Our PM Modi
making it amply clear that India will not be joining the mega trading deal—RCEP
(RCEP) as to key concerns have not been addressed with PM Modi, making it clear
that New Delhi will not compromise on its “core interests”. While Speaking at
the RCEP meet in Bangkok, PM Modi said, “The Present form of the RCEP agreement
doesn’t full reflect the basic spirit & the agreed guiding principles of
RCEP. It also does not satisfactorily address India’s outstanding issues &
concerns. In such a situation, it is not possible for India to join the RCEP
PM Modi also added that “When I measure the
RCEP agreement with respect to the matters of the interest of all Indians.
Therefore, neither the Talisman of Gandhiji, nor my own Conscience permits me
to join the RCEP”.
Issues that concerned New Delhi was that of inadequate Protection against
import surge, insufficient differential with China, keeping the base year as
20143, & no credible assurances on Market access & Non-Tariff barriers.
Meanwhile ASEAN sources reacting to the development called it a “Win Win
outcome”, with both sides getting to inform their constituencies back home that
they got a RCEP 15, & India gets to tell its constituencies that India held
out to safeguard domestic interests.” Adding, “If a deal could be struck before
the 15 complete their legal scrubbing, then it could be 16 members, if nor, 15
will proceed ahead without India. Meanwhile 15 will be able to benefit,
although not as much as with India in RCEP”. Calling “RCEP deal is better for
the world economy bucks the Trend of Protectionism being equated with nationalism”.
Negotiation for the deal started in 2012, in Cambodia & would have been one
of the biggest Free Trade Agreement in the world. India’s Position was a
difficult one as a while it can’t remain isolated, it wanted to make sure that
Chinese goods dominate in the Market. New Delhi, in Particular, had sought
protections against Chinese Agricultural Products. A Free Trade Agreement
however could have been the next big leap after 1991, Liberalization policy
that India needs to huttle towards its target of becoming a $5 Trillion Economy
India has $100bn Trade with five Trading Partners. But it doesn’t have FTA’s
with any of them. If we have to double the GDP by 2022, it also needs to
discuss its trade volume with its big trading partners.
Analyst, & also from Economist point of view though the deal would have had
some other effects, but being Indian I feel
that This is very Bold, Very Decisive Move by our Leadership at the helm
of Affairs who treads on the principles of Antyoday & safeguarding Nation’s
interests than any other interests which would have been disastrous for Indian
Economy in later years, which is a big No-No by our PM Mod who in detail took
the cognizance of everyone’s views, & also furthering Nations Safety &
Security. A Thoughtful Decision, by our Leadership who is very visionary in
each & every move. Transformation is keyword for our Leadership, the reason
for him to get in 2nd term as PM of world’s largest Democracy, in
2019 General Elections. Thus these were my honest viewpoints, with a detailed
analysis on Trade agreements as such. Our PM Modi’s measures benefited India,
especially regarding Imports—
Agarbati imports from Free Trade Category to”
5% Duty on Palm oil imports
Restrictions on Imports on Peas &Pulses
Increase in Minimum Import Price of Cashew
Launched Steel Imports Monitoring System-To
Monitor the import of Steel.
Whereas Congress Pushed India towards a
downfall-Why Trade Deficit with ASEAN Ballooned Post FTA signing why?
A Result of
Poor Negotiation & weak Leadership in a hurry to sign the Agreement &
No strong Domestic stance, During Congress Regime—not enough measures to
safeguard or Protect Domestic Industry. UPA’s Trade Blunder—Poor Negotiations
of Free Trade Agreements, Distorted Trade Balance, NDA cleaned up the messy
situation created by Unholy Congress during its Regime, NDA got ASEAN to Agree
to Review Unfavorable FTAs signed by UPA, Strong Decisions on Imports to help
basically domestic Industry, thereby India Decided not to sign the RCEP Deal,
No Compromises whatsoever, only safeguarding the Interests of Nation.
Dr. Sukanya Subbanna Iyer
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