India withdrew from the Regional Comprehensive Economic Association (RCEP) last year as joining it would have had quite negative consequences for the country’s economy, Foreign Minister S Jaishankar said on Wednesday. In a speech at an online discussion hosted by the Center for European Policy Studies, Jaishankar also lobbied for reform of the United Nations, saying that one or two countries should not be allowed to stop the process for their “perpetual benefit.” .
On the proposed free trade agreement between India and the European Union, Jaishankar said New Delhi was seeking a “fair and balanced” deal. When asked about the RCEP, the foreign minister said India withdrew because a number of key concerns raised by him were not addressed.
His comments came three days after 15 Asia-Pacific economies signed the RCEP agreement that created the world’s largest free trade zone. “We basically saw that several of our key concerns were not addressed. Then we had to take a call if you enter into a trade agreement if your main concerns are not addressed or if you take a call saying this is not in my interest,” Jaishankar said during an online discussion hosted by the Center for European Policy Studies.
“We received a call that, given the way it is currently, we are not interested in entering into this agreement because it would have fairly immediate negative consequences for our own economy,” he said.
The RCEP deal sealed on Sunday comprised 10 member countries of the Association of Southeast Asian Nations (ASEAN) and five of the bloc’s dialogue partners: China, Japan, South Korea, Australia and New Zealand. “Because you are trading it doesn’t mean you have to suspend your computing power at the end of the trade. I think we did those calculations. Frankly, what we did with regard to RCEP is not a generic position versus trade,” Jaishankar said.
India was part of the RCEP negotiations for almost seven years. Unresolved issues included inadequate protection against import surges, a lack of credible guarantees for India on market access, non-tariff barriers, and possible circumvention of rules of origin by certain countries. Referring to the long-pending India-EU free trade agreement (FTA), Jaishankar said: “We want a fair and balanced FTA,” but added that what is fair and balanced is a matter for negotiation.
“I recognize that an FTA with Europe is not an easy negotiation, probably in the world, it must be the most difficult negotiation. It is an FTA of a very high standard,” he said. Talks on NAFTA have stalled since May 2013, when both sides failed to close substantial gaps on crucial issues, including the state of data security for the IT sector. Launched in June 2007, the negotiations for the proposed agreement have witnessed many obstacles, as the two sides have great differences on crucial issues.
In his remarks, Jaishankar also spoke about “economic multipolarity” and how it changes for different countries. “When I look at my trade accounts, my economic accounts, I actually have five major accounts which are the US, the European Union, China, ASEAN and the Gulf. These five are the five economic poles around which a large part of my trade and my investment is organized, “he said.
“So that I can get the best of it, in a multipolar world, there is a very simple trading rule which is that if you advance on any account, you advance on all accounts. So you constantly need to move on, on and on, because the moment you turn to one account, you turn to all accounts, “he said. On the United Nations, he said it was established 75 years ago and needs urgent reforms to reflect the realities of the world today.
“Everything needs some kind of refreshment, update, etc. We cannot allow the interest of one or two countries to continue that wants to freeze a moment in history so that its perpetual gain continues,” he said.
Jaishankar said allowing the “stalemate” to continue will hurt the UN.
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