A Paradigm Shift towards “India First” @ ASEAN -“No to Regional Imperialism” - The Fearless Indian
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A Paradigm Shift towards “India First” @ ASEAN -“No to Regional Imperialism”

  • Sukanya Iyer
  • November 6, 2019
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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.”

PM Modis 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.

The ties 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?

This began 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 Deal?

It would 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?

Unlike the 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?

It became 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?

Seven 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?

India’s 11th 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?

Amul’s Tweet:

On behalf 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.

Praveen 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”.

But experts 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.

“The 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.

The 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 agreement”.

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”.

The Key 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”.

The 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.

As an 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” Restricted Category”

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.

Jai Hind

Dr. Sukanya Subbanna Iyer

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