India has told the member states of Regional Comprehensive Economic Partnership (RCEP) that it will not sign the agreement as long as its concerns are addressed. The member countries include ten member states of the Association of Southeast Asian Nations (ASEAN) (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) and 6 Asia-Pacific countries (Australia, China, India, Japan, South Korea and New Zealand) with whom ASEAN already has free trade agreements.
Piyush Goyal, Commerce and Industry Minister, who is at the helm of the deal, has already said that any free trade deal will be signed only based on ‘National Interest’ of the country. The other member countries free-trade block are blaming India for delaying the deal, but, India is not ready to give on the remaining issues easily. Such a tough negotiating style has rarely been seen from any Indian government.
Further, while all other parties are ready to take the deal, it appears that Modi government has indeed binned the RCEP until their demands are met, reflecting their unrelenting commitment towards Indian interests.
Sources: India decides not to join Regional Comprehensive Economic Partnership (RCEP) agreement. PM stands firm as key concerns not addressed; there will be no compromise on core interests. RCEP agreement does not reflect its original intent. Outcome not fair or balanced. pic.twitter.com/o058sJZnOn
— ANI (@ANI) November 4, 2019
Throughout the political history of post-Independence India, the governments of the country have been very poor negotiators. In dealing with our neighbouring nations- Pakistan and China, the government of Jawaharlal Nehru and Indira Gandhi succumbed very easily even when they were negotiating from a position of strength.
Pakistan lost four wars (47-48, 65, 71, and 99) with India, but, we could not take Pakistan Occupied Kashmir back. Even in 1971, when India has 93,000 prisoners of War (PoW) from Pakistan, and Indira Gandhi had a chance to take back PoK, the government negotiated poorly.
The dealing with China has been even worse. In 2003, Atal Bihari Vajpayee accepted their claim of Tibet without asking for anything in return. Nehru supported China’s claim as permanent member of the United Nations’ Security Council and refused the seat for his own country.
Cleary, absolute ‘National Interest’ has not been supreme for the previous government in dealing with foreign countries. But, in Modi government, the ‘Chanakya School of foreign policy’ is held in high regards. According to this school of thought, a country should adhere to ‘Realism’ on foreign policy matters and ‘National Interest’ should be supreme while dealing with any other country. This is in stark difference with ‘Nehruvian foreign policy’ which used to see foreign policy as a tool of ‘international good’ rather than ‘National Interest’.
The poor negotiation skills of Indian governments, especially that Congress-led ones, were on display even when the government-brokered trade deals.
The ASEAN-India FTA, signed in 2009 by the UPA government gave disproportionate concession to the countries like Vietnam and Indonesia. India agreed to eliminate 74 per cent of tariff lines while Indonesia and Vietnam eliminated only 50 and 70 per cent tariff lines respectively.
The then CM of Kerala, V. S. Achuthanandan, led a delegation to PM Manmohan Singh to protest against a free trade deal with ASEAN. Kerala, a major exporter of plantation products, experienced setback due to the South Asian Free Trade Agreement (SAFTA), signed in 2006 by the UPA government. The cheap coconut imports from Sri Lanka hurt the state’s coconut cultivation industry.
The state received another setback in the form of ASEAN-India FTA due to cheap palm oil imports from Malaysia, which is the second-largest producer of Palm oil. The cheap palm oil imports from Malaysia severely hit Kerala’s capacity. Recently, Modi government raised import duty on palm oil from 45 per cent to 50 per cent in the wake Malaysian Prime Minister’s comment on Kashmir.
The poorly negotiated India-ASEAN FTA severely hit the farming sector of the country, especially in South India, which has similar product base as that of Southeast Asia.
Slamming Sonia Gandhi over her remarks on Modi government’s approach towards RCEP, Piyush Goyal had pointed out the failures of UPA government on Twitter: “So where was she – When trade deficit with RCEP nations increased from $7 Billion in 2004 to $78 Billion in 2014? When her Govt forced India to join RCEP negotiations with China in 2011-12.”
A tough negotiator like Piyush Goyal, who has previous experience in the field of international trade, could surely bargain better than Kamal Nath or Anand Sharma (trade and commerce minister during UPA regime) who were novice in subject matter expertise.
According to a report by DBS Bank, India’s negotiation is posing a challenge to RCEP. But the Indian side is still hell-bent to find a better deal.
Even the US government is impressed by negotiation skills of Indian delegation. ‘India is a tough trade negotiator’ said, Alyssa Ayres, Senior Fellow, Council on Foreign Relations (CRF).
In November last year, US President Donald Trump praised the negotiation skills of the Indian side. “We’re trying very hard to make better trade deals with India. But, they’re very good traders. They’re very good negotiators. You would say right. The best. So we’re working. And it’s moving along,” said trump.
The shrewd business skill of Indian traders is being praised by countries across the globe. Indian businessperson are regarded as best negotiators in foreign countries like the United States, but, the Indian government under Congress party signed hurried and poorly negotiated trade deals, which harmed Indian interest.
Under the leadership of PM Modi and Commerce minister Piyush Goyal, the Indian side is negotiating better deals whether it is trade or security. This has happened because the government has adopted Chankayan school of foreign policy which argues for the supremacy of ‘National Interest’.
