RCEP (ASEAN+6) Talks may Miss December 2016 Target

· Single Tier System for Tariff Cuts Prevail Over India Proposed Three Tier System

Meanwhile, on the RCEP front, ministers from participating economies convened in Vientiane, Laos, in early August in a bid to iron out some points of contention in the 16-country talks. The meeting was followed by a negotiating round the following week in Ho Chi Minh City, Vietnam.

Comprised of the 10 members of the Association of Southeast Asian Nations (ASEAN) and its six free trade agreement partners – Australia, China, India, Japan, South Korea, and New Zealand – the proposed RCEP would cover a combined GDP of over US$22.6 trillion and a population approaching 3.5 billion.

The negotiations themselves include, among other subjects, trade in goods and services, investment, competition, intellectual property, and dispute settlement.

Indian Commerce and Industry Minister Nirmala Sitharaman conceded last month that the talks may miss the December 2016 target, which already represents an extension from the initial goal of end-2015. The fifteenth round of negotiations is scheduled for 11-22 October in Tianjin, China.

Despite the difficult process, last month’s meetings did reportedly lead to some convergence on certain key issues, such as market access in goods, along with advances on some intellectual property rights-related disagreements.

For example, regarding the former, RCEP participants have reportedly agreed to pursue a single-tier system of tariff reduction – granting the same cuts to all participants – in lieu of the proposed three-tier system, for which India had been one of the key proponents. In the previous three-tier arrangement, ASEAN countries would receive the greatest market access improvements, followed by countries with which India had already signed an FTA – specifically, South Korea and Japan. The countries with which India had no earlier FTA – China, Australia, and New Zealand – would see the lowest cuts.