NEW DELHI, FEBRUARY 22: India’s strong negotiating stance on services, especially for liberalising movement of workers, at the regional comprehensive economic partnership (RCEP) being worked out between 16 nations, is being resisted by the 10-member Asean but backed by Australia, which is trying to act as a mediator between the two.

“In last week’s negotiating round in Brunei, the Asean tried to brush away India’s position that progress in Mode 4 (movement of workers) was a must for further progress in talks on goods. Australia, on the other hand, realised how important it is for India to get a good deal in services and has been trying to act as a mediator between India and the Asean on the matter,” an official closely following the RCEP negotiations told BusinessLine. The RCEP, which includes the Asean, India, China, South Korea, Japan, Australia and New Zealand, seeks to create one of the largest free trade blocs in the world, as it accounts for 45 per cent of the world’s population and over $21 trillion of gross domestic product.

No progress on goods

In Brunei, there wasn’t any progress in the area of goods as initial detailed offers made by the Asean and Japan were for lower number of goods than they had committed to when talks started, and they were asked to rectify it. “We have enough breathing space now and can wait for the progress in services without offering anything more in goods,” the official said.

New Delhi floated a second paper on the services sector at the negotiations where it emphasised that it was important to liberalise Mode 4 as freer movement of people was essential for successfully opening up the other modes of services as well, including Mode 3 (commercial presence ) and Mode 2 (consumption abroad).

“If we don’t have easy movement of people, how will companies establish their commercial presence in partner countries,” the official said.

Asean hurdle

The Asean, which did not give India any concessions in easing movement of labour in the bilateral comprehensive economic cooperation agreement signed by the two earlier, is showing the same reluctance in the RCEP negotiations.

“The Asean, through its lack of interest in India’s paper, indicated that it did not want to offer much in Mode 4 of the services negotiations,” the official said.

Australia FTA

Australia, which is also bilaterally negotiating a free trade agreement with India, however, seems to understand New Delhi’s seriousness about getting a good deal in services.

“It is a conscious decision taken by the government that all future free trade deals that India gets into with other countries would have to result in substantial gains in services. Australia knows that as it is also trying to conclude a bilateral FTA with India,” the official said.

The next negotiating round for RCEP is in Perth, Australia, in April, followed by one in New Zealand in June.

“There will be three more rounds this year after the one in New Zealand as there is great urgency among members to wrap up the talks as soon as possible,” the official said.