India wins key concession on services at RCEP Singapore Ministerial

• Members of the proposed Regional Comprehensive Economic Partnership (RCEP) trade deal have conceded to India’s demand to liberalize their services market and allow movement of skilled professionals. This may help India, which had so far been a reluctant participant, to conclude RCEP negotiations by the year-end.

• India believes strong commitments in services by RCEP countries will open up opportunities for its burgeoning skilled professionals seeking gainful employment.

• At the two-day Singapore Ministerial, which concluded on Friday, the 16-member grouping adopted a “package of year-end deliverables”, negotiations for which need to be completed by November. RCEP negotiations are on since 2013.

• With general elections due in India and Indonesia next year, countries are seeking to conclude substantial negotiations. However, Indian officials believe the deal cannot be signed before the end of 2019.

• There may be another two rounds of Ministerial meetings before the heads of states meet at the RCEP Summit in November. The trade ministers have directed negotiators to intensify negotiations during their meeting in Auckland between 17 and 24 October.

• Members also agreed that countries, which do not have trade agreements, can negotiate bilaterally to decide more ambitious tariff liberalization within a certain range. India is also likely to phase out tariffs on certain sensitive items with China beyond 20 years. This will allow India to allay concerns of domestic industries such as steel and textiles, which fear that China will start dumping goods once RCEP takes effect.

• India had set up an informal group of ministers (GoM) under Prabhu, with growing opposition to the RCEP deal from within and outside the government.

• RCEP is a proposed trade pact between 10 Asian countries and their six FTA partners–Australia, China, India, Japan, Korea and New Zealand. It comprises 25% of global GDP, 30% of global trade, 26% of foreign direct investment flows and 45% of the population.

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