To join or not to join: Congress a little confused on RCEP

Senior party leader and former Finance Minister P Chidambaram said there are “pros and cons to India joining the RCEP” and slammed External Affairs Minister S Jaishankar for having “railed against trade agreements and praised the virtues of protectionism”.

Anand Sharma, former Union Commerce minister and Congress deputy leader in Rajya Sabha, told The Indian Express that not joining RCEP was a “strategic blunder” and a “backward leap.”

Editorial | Seize the deal: Trade lifts all boats, New Delhi must get inside the RCEP tent at the earliest opportune moment.

As Commerce minister, he had led India in the negotiations.

Senior Congress leader and former Union minister Jairam Ramesh, on the other hand, told The Indian Express that RCEP is “Regional China Expansion Programme” and argued that India did the right thing by not joining it.

RCEP is a regional trade agreement originally negotiated between 16 countries — ASEAN members and countries with which they have free trade agreements (FTAs), such as Australia, China, Korea, Japan, New Zealand and India.

Recalling that the Congress had opposed signing the agreement last year, Ramesh said, “If anything, events in the past year have vindicated our position.”

Last October, Ramesh, along with senior party leader A K Antony, had announced the Congress’s changed position on RCEP. Both were members of the UPA government which had decided to join the negotiations for RCEP in 2012. Antony and Ramesh had then argued that the economic context had changed.

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Leaders and trade ministers of 15 Regional Comprehensive Economic Partnership (RCEP) countries pose for a virtual group photo in Hanoi, Vietnam on Sunday, Nov. 15, 2020. (VNA via AP)

Ramesh had then said: “When the UPA government negotiated the free trade agreements, the economy was booming. We did not have the economic crisis that we are having today. There was an investment boom. Exports were growing. Today exports are falling, investment is falling…so the economic context was totally different when the UPA negotiated the free trade agreements.”

On Tuesday, Sharma said, “Not joining it (RCEP) is a strategic blunder. India has to remain integral to the Asia-Pacific region for economic integration and for both investment and trade. It is in India’s strategic and economic interests to be a part of the process of Asia- Pacific integration. We cannot be shortsighted and merely look at the trade deficit numbers, because there are essential imports which India has from some of these countries.”

He said: “India needs edible oil and we import palm oil in huge quantities from Indonesia and Malaysia. From Indonesia and Australia, we also import coal in large quantities. We also import petroleum products from some of the countries, including Malaysia. Yes, there have been concerns about the huge trade imbalance with China but that is a separate issue. We cannot be timid. If you want to be a global player you can’t remain out of the largest trade bloc that covers almost 30 per cent of the world GDP.”

Sharma also said “With much effort which spanned over years and years India had been able to open the door because we were being prevented from joining. The original concept was ASEAN plus three….It was India which pushed hard during our (UPA) time and made it Asean plus six….I was able to get the support of Japan and South Korea. So from the strategic point of view, we have leaped back. We could have always negotiated safeguards to protect our interests. But to be out of it is not good. Keeping out of the RCEP is a backward leap,” he said.

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On Monday, Chidambaram had tweeted, “RCEP born, it is the world’s largest trading body. 15 nations in our region are members of RCEP, India is not among them. There are pros and cons to India joining RCEP. But the debate has never taken place in Parliament or among the people or involving the Opposition parties. It is another bad example of centralised decision-making unacceptable in a democracy,”

On Tuesday, he pointed out that editorials in English newspapers he reads carried editorials “today that India would be better off by being a part of RCEP”. “I would reserve a final view until the Congress party has taken a considered position on the issue,” he tweeted. “I must, however, express my dismay over the speech by Foreign Minister S Jaishankar yesterday at the Deccan Dialogue when he railed against trade agreements and praised the virtues of protectionism. Mr Jaishankar is speaking in the language and in words that I heard in the 1970s and 1980s!”