New Delhi, November 4th 2019: At a time when the Indian economy is in the doldrums, India should not move forward on the RCEP at any cost, warned farm rights advocacy group Alliance for Sustainable & Holistic Agriculture (ASHA). “The development in Thailand today, where other countries decided to go ahead while India did not get on board the RCEP is good. Pulling out of negotiations is not unprecedented and it has happened with Trans Pacific Partnership (TPP) in the past, for instance, which is now a dead deal. RCEP would have been suicidal for our economy and its farmers and Government of India need not feel compelled to sign this deal even at a later stage. A similar approach is needed in the case of other FTAs too. Farmer movements will not let up on the resistance they are putting up if the government does not protect their interests”, said ASHA in a statement released to the media today.
Free Trade Agreements are supra-national plurilateral or bilateral deals, which involve terms and conditions more than just commerce and market access. Investor protection provisions, provisions around public procurement and privatisation of public services, intellectual property rights clauses, e-Commerce and data-related provisions are all part of this mega FTA called Regional Comprehensive Economic Partnership (RCEP). At a time when unemployment in India is at a four-decade high, when agrarian crisis continues unabated, when there is falling industrial production, and with widening fiscal deficit, abetted by decreased revenues from import duties, to sign on to RCEP makes no sense. Any further deterioration in the economy will leave its overall impact on rural and agrarian economy too, obviously.
“The government was trying to project that it is doing tough negotiations by pushing back some provisions for a few years, but we should remember that these provisions which can be broadly termed as anti-citizen, are going to come back into the RCEP sooner or later – like the IPR related clauses in seeds (UPOV) and Investor-State Dispute Settlement mechanisms”, warned ASHA.
“In these agreements which are meant for attracting investments other than for just commerce, our government’s position is often dictated by export prospects in services sector and potential investments that can be brought in. Farmers and their interests are repeatedly sacrificed in policy-decision-making. It needs to be remembered that the share of agriculture in these trade deals is actually quite low in value, even as this is a matter of life and death of lakhs of farmers. India should note that other trade deals like the EU-US FTA are being negotiated by keeping out agriculture from the purview of the deal”, said Kavitha Kuruganti, co-Convenor of ASHA.
“An analysis of the past FTAs clearly tells us a few things – one, that our trade deficit with those FTA partners increased significantly after the agreement took effect; two, that our producers have experienced significant price crashes especially related to plantation products after the FTAs were signed; three, through FTAs, India has not out-performed overall export growth and therefore, there is no additional benefit gained; four, the export utilisation rate is very low even after the government negotiates some clauses. All of this shows very clearly that the benefits are being over-estimated, and the fall-outs are being ignored. India should basically learn from the past mistakes and therefore, not sign on to RCEP, now or in the future”, said Kiran Vissa, co-Convenor of ASHA.
ASHA also objected to the undemocratic and secretive nature of the negotiations so far, where the government was going to make commitments without full transparent consultations with the Parliament, state government, primary stakeholders like farmers’ unions etc.
While the public debate has covered the definite adverse impacts that will be faced by the dairy sector and milk producers if RCEP provisions include trade in milk products, with significantly cheaper dairy produce coming in from New Zealand and Australia, the impacts on other sectors of agriculture has been less-discussed so far. Plantation producers of coconut, oil palm, areca nut, pepper, rubber, cardamom etc., are also under great threat and have already suffered from past FTAs. In 2018-19, the trade deficit in plantation commodities was already Rs. 5716 crores with RCEP countries, even though India had an overall trade surplus in these commodities. There are also concerns about impacts on oilseeds producers, cotton and wheat farmers in India.
ASHA believes that the provisions that the Indian government was negotiating for, are inadequate to protect farmers’ interests. “Asking for greater access to markets like China and other countries for our exports, and negotiating for some concessions and differential tariffs does not really defuse the worries around import deluges we will have to face (which is about both cheaper imports and large quantities of imports). Further, negotiating the base year for tariff reduction – whether it should be 2014 or 2019 – will not matter too much since that is only a time-buying tactic and India will be forced to take up progressive or rapid tariff reduction to zero in any case. The same is true for long-lead on tariff reduction. Similarly, the auto-trigger mechanism is meaningless even if it is included as a safeguard because we don’t have real time surveillance mechanisms and such an auto-trigger does not respond to price crashes. On the Rules of Origin negotiations, even if India managed to address de-toured imports from China and other countries, the direct deluge would still be a problem”, said ASHA in a statement.
“It is a fallacy to talk about Indian producers having to become more efficient and competitive by getting into deals like this. This was one of the arguments proffered by the Union Commerce Minister when he said that inefficiencies cannot be protected forever, and that our consumers also have to benefit. Let us remember that consumers, who also include rural Indians in large numbers, will not have purchasing power left if production and employment are hit and when the overall downward spiral becomes unstoppable due to deals like RCEP. In matters like livelihood security and food sovereignty, efficiency is not the parameter. In any case, even the so-called efficient production systems like in the developed world are getting propped up by very large subsidies and it is against such cheap subsidised produce that our farmers are being made to compete, which is very unfair. It is clear that there are no benefits to be gained from RCEP and only hardships to be faced”, said ASHA.
For more information, contact: Kavitha Kuruganti at 8880067772; Kiran Vissa at 9701705743