PM Modi invokes Mahatma Gandhi to opt out of RCEP deal

India on Monday opted out of the proposed Regional Comprehensive Economic Partnership (RCEP) agreement, even as the 15 other nations, which participated in the negotiation for the pact, decided to go ahead and sign it in 2020.

Prime Minister Narendra Modi joined the leaders of the other RCEP negotiating countries at a summit in Bangkok and conveyed to the New Delhi's decision to stay out of what would have created the largest free trade area in the world.

New Delhi decided to stay out of the RCEP, primarily because the draft agreement did not provide adequate protection against surge in cheap imports from China to India after its implementation.

“Recall the face of the poorest and weakest man you have seen, and ask yourself if this step you contemplate is going to be any use to him,” Modi quoted Mahatma Gandhi, while conveying New Delhi's decision not to join the RCEP. Prime Minister is learnt to have told his counterparts from the other nations that neither the guiding philosophy spelt out by Mahatma Gandhi, nor his own “conscience” will let him give the nod to sign the RCEP pact, as the present form of the proposed agreement does not fully reflect the basic spirt and the guiding principles agreed in 2012.

The decision of the Government of India was guided by its assessment of the current global situation, balance and fairness of the present form of the agreement as well as the impact the proposed agreement would have had on the lives and livelihoods of all Indian, particularly the vulnerable sections of the society, Vijay Thakur Singh, Secretary (East) at the Ministry of External Affairs (MEA), told journalists. She said that several issues related to the core interests of India remained unresolved.

“India has participated in good faith in the RCEP discussion and negotiated hard with the clear-eyed view of our interests. In the given circumstances, we believe that not joining the agreement is the right decision for India,” said Singh.

The Congress and the other opposition parties have been warning the Government led by Bharatiya Janata Party (BJP) against signing the RCEP agreement – arguing that it would deal a body blow to the already struggling economy of India. The Swadeshi Jagran Manch (SJM) – an offshoot of the ruling party's mentor Rashtriya Swayamsevak Sangh (RSS) – too has been vocally arguing that New Delhi must opt out of the agreement.

India was insisting on an “auto-trigger mechanism” to protect its own industries from surge in cheap imports after signing of the RCEP pact, particularly from China. The “auto-trigger mechanism” would have ensured that safeguard duties would be automatically imposed after imports from another country would reach a certain threshold.

New Delhi opted out of the RCEP as it was concerned over lack of protection against possible circumvention of rules of origin as well as lack of credible assurances on market access and non-tariff barriers.

The 10 ASEAN (Association of South East Asian Nations) nations – Brunei, Vietnam, Cambodia, Laos, Thailand, Indonesia, Malaysia, Myanmar, Philippines and Singapore – as well as the six free trade partners of the bloc – India, China, Japan, Australia, New Zealand and South Korea – launched the RCEP negotiations in November 2012.

The statement issued at the end of the third RCEP summit on Monday noted that the 15 of the 16 negotiating countries had “concluded” text-based negotiations for all 20 chapters of the proposed agreement and “essentially” resolved “all market access issues”. The leaders of the 15 nations had tasked officials of the respective governments to carry out the legal scrubbing of the proposed agreement so that signing could start in 2020.

They also noted that India had “significant outstanding issues”, which remained unresolved. “All RCEP participating countries will work together to resolve the outstanding issues in a mutually satisfactory way. India’s final decision will depend on satisfactory resolution of these issues,” added the statement issued in Bangkok.

Modi earlier had a bilateral meeting with Australian Prime Minister Scott Morrison, who was quoted by Press Trust of India saying that the door would remain open for India to join the RCEP.

Prime Minister conveyed to the leaders of the other RCEP participating nations that India would not be joining the agreement, Secretary (East) at the MEA reiterated when journalists asked her on the possibility of New Delhi reviewing its decision and signing the agreement.

Had India agreed to sign the RCEP pact, the agreement would have created a free trade area which would have covered 3.6 billion people or the half of the global population and accounted for 39.5 % ($ 49.5 trillion) of the GDP of the world.