RCEP set to miss 2015 deadline, talks to spill over to next year

NEW DELHI: The Regional Comprehensive Economic Partnership (RCEP), an Asia-Pacific free-trade grouping that includes India, is set to miss its deadline of 2015 even as pressure mounts on the bloc to reach an agreement following the 12-country Trans-Pacific Partnership sealed by developed nations. One cause for the delay is India and Indonesia failing to make offers for tariff liberalisation at talks held in Busan, South Korea, last week.

"Our stakeholder consultations went on till the first week of October and we are still getting comments from them after which we will finalise the offers," an official said, explaining the delay.

Of the 16 members of the RCEP, 14 made their offers of tariff cuts.

"The talks will spill over to next year. It’s been decided that the next round of negotiations will be held in February but who would host it is not yet clear. Australia plans to host the April round and New Zealand the one in June," the official added.

Sources said the delay could also be due to India reconsidering an offer it planned to make to China, Australia and New Zealand to remove duties on 42.5 per cent of the items traded with each of the countries.

RCEP is a comprehensive free-trade agreement including goods, services, investment, competition and intellectual property rights between the 10 ASEAN countries and its six free-trade agreement partners Australia, China, India, Japan, South Korea and New Zealand.

The pressure to conclude the RCEP pact is greater following the US-led TPP deal.

Seven countries common to both trading blocs – Australia, Brunei, Japan, Malaysia, New Zealand, Singapore and Vietnam – are pushing for an accord on RCEP to be reached in the same manner as the TPP.

Another reason for the delay is the emergence of differences over how to certify rules of origin, which determine the national source of a product and the associated benefits and duties. While Australia and New Zealand want self-certification by exporters, others including India are in favour of third-party validation.

For a product to attain the status of ‘originating material’ in RCEP, the concerned country should ensure a minimum 40 per cent value addition to get the duty benefits.