RCEP Members will Work with India to Sort Its Sensitivities: New Zealand Trade Minister

New Zealand’s Minister of State for Trade Damien O’Connor has said that his country would love to see India as part of the Regional Comprehensive Economic Partnership (RCEP) agreement and all fifteen countries had agreed to work with New Delhi to sort out its sensitivities before a final agreement is reached.

“We understand sensitivities of India (on RCEP) domestically. All fifteen RCEP countries are committed to work with India through those (sensitivities) before final agreement can be reached,” he said talking to the media following an interaction organised by CII on Wednesday.

India announced on Monday, after the RCEP Leaders Summit in Bangkok, that it had exited the RCEP agreement being worked out by sixteen countries as its core concerns were not being addressed. The RCEP includes the ASEAN, India, China, Japan, South Korea, Australia and New Zealand.

India’s External Affairs Ministry’s statement came as a surprise as the RCEP Leaders joint statement, endorsed by the leaders of all sixteen countries including Prime Minister Narendra Modi, stated that other members would continue discussions with India to sort out its differences. A decision can be taken later based on the results of the talks, it said.

Explaining the statement, Commerce and Industry Minister Piyush Goyal at a press conference on Tuesday said that while India’s decision to quit RCEP was final at the moment, India was open to further discussions if its problems are addressed.

O’Connor assured that New Zealand’s dairy industry would not pose a direct challenge to India’s dairy sector. The proposed opening up of the dairy sector to New Zealand by lowering/ eliminating tariffs was one of the issues strongly opposed by Indian farmers and the dairy industry.

“India’s dairy industry is larger than New Zealand’s. We have exported dairy products to India only to complement Indian dairy sector in times of drought and times when our products were needed,” he said.

The biggest challenge to Indian industry and farmers from the RCEP pact comes from China which runs a trade surplus of over $ 50 billion with India annually. India wants adequate rules of origin and safeguard duties in place to protect the domestic sector from import surges.

The 15 RCEP countries (not counting India) have agreed to sign the pact sometime next year. All sixteen members together account for 39 per cent of global GDP, 30 per cent of global trade, 26 per cent of global foreign direct investment flows and 45 per cent of the total population.