Modi, Japanese PM to discuss fate of RCEP in summit

Narendra Modi, India's prime minister, shakes hands with Shinzo Abe, Japan's prime minister. (Reuters photo)

The fate of the proposed Regional Comprehensive Economic Partnership (RCEP) agreement will depend much on the forthcoming summit between Prime Ministers of India and Japan.

Prime Minister Narendra Modi will host his Japanese counterpart Shinzo Abe for the annual India-Japan summit on December 15 and 16. Though neither New Delhi nor Tokyo has so far officially announced the venue of the summit, it may be held in Guwahati – the main city of Assam in the northeastern region of India.

The two Prime Ministers are expected to discuss the fate of the RCEP agreement. Abe is likely to nudge Modi to review New Delhi's decision to stay out of the mega trade deal. He is also expected to convey to the Prime Minister that Japan was ready to discuss with India and 14 other RCEP negotiating nations in order to find out a way to allay New Delhi's concerns over the proposed agreement.

Japan has already indicated that it, too, might review its decision to join the RCEP if India stuck to its decision to stay out of it.

Japan's Deputy Minister for Economy, Trade and Industry, Hideki Makihara, recently indicated during an interview with Bloomberg that Abe's Government in Tokyo was considering not signing the RCEP unless India reversed its decision to stay out of it.

“Whether we can keep India in the RCEP, we cannot yet tell for certain at this moment,” Japanese Foreign Minister, Toshimitsu Motegi, said while delivering a speech in Tokyo shortly after returning from a tour to New Delhi.

New Delhi conveyed to Tokyo that it might consider returning to the RCEP only if it received a “firm indication” that its “core interests” would be accommodated in the proposed agreement.

New Delhi decided to stay out of the RCEP, primarily because it anticipated a surge in imports from China to India after its implementation and it was concerned over lack of protection against it.

It had suggested that the RCEP agreement should provide for an “auto-trigger mechanism”, which would ensure that the safeguard duties would be automatically imposed when imports from another country would reach a certain threshold.

But as 15 other RCEP negotiating countries had not been able to reach a consensus on New Delhi's proposal, it announced its decision to stay out of the agreement. India was also concerned over a lack of protection in the draft RCEP agreement against circumvention of the Rules of Origin. It apprehended that India’s market could be flooded with the cheap import from a non-RCEP country that might route its goods through a RCEP-country.

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