Services key to trade pact
New Delhi: The Regional Comprehensive Economic Partnership (RCEP) will be incomplete without an agreement on the services sector, commerce secretary Rita Teaotia said on Friday.
"The area of concern is that an FTA (free trade agreement) cannot be one-sided and focus only on goods. Comparative advantages, sensitivities and ambitions of member countries will have to be given due recognition in order to achieve a balanced agreement," she said.
"Today the conversation is that the agreement on goods is easy and therefore the ambition should be to move from 86 to 92 per cent. On the other hand, the argument is not to go beyond 60 per cent of services and that too with several caveats," Teaotia said.
The RCEP is a proposed trade pact between Asean, a regional organisation comprising 10 countries, and its six FTA partners - Australia, China, India, Japan, Korea and New Zealand.
It accounts for 25 per cent of global GDP, 30 per cent of global trade, 26 per cent of foreign direct investment (FDI) flows and 45 per cent of the total population.
According to Teaotia, the services sector holds immense importance as it contributes more than 50 per cent of the GDP of all the RCEP countries.
India is pushing for a deal in the services sector because of its leadership position in that area. India has sought better arrangements and more concessions as well as facilitation of free movement of professionals but the other countries of the proposed FTA bloc are opposed to this. India has asked for the services agreement to be inked as a quid pro quo.
Following the economic slowdown and the consequent job losses, most countries in the bloc have turned protectionist when it comes to talks on norms to ease temporary movement of skilled workers, official sources said.