Will continue IPEF trade talks with an open mind, says Goyal
Lauding the IPEF ministerial as a success, and complimenting the US for its initiative and the speed with which IPEF talks are proceeding, Goyal said India was comfortable with the text of the ministerial statements on three other pillars of the framework — supply chains, decarbonisation, and anti-corruption.
India has not joined the trade pillar of the Indo-Pacific Economic Framework (IPEF) because the nature of benefits remain unclear and the commitments may constrain India’s domestic choices, but it will continue to closely engage with the trade talks as an observer and pursue negotiations with an “open mind”, commerce minister Piyush Goyal has said.
Lauding the IPEF ministerial as a success, and complimenting the US for its initiative and the speed with which IPEF talks are proceeding, Goyal said India was comfortable with the text of the ministerial statements on three other pillars of the framework — supply chains, decarbonisation, and anti-corruption.
But on trade, Goyal identified four areas — digital, environment, labour and public procurement — that led India to hold back its consent at this stage.
“The contours of the framework, particularly any commitments required on environment, labour, digital trade and public procurement, are certain areas in which a broader consensus has yet to emerge among nations,” he said. “We are yet to see what benefits countries will derive and whether any conditionalities on, for example, environment may discriminate against developing countries who have the imperative to provide low cost and affordable energy to meet the needs of a growing economy.”
India was also in the process of framing its digital framework and law, especially on data and privacy, the minister said.
The linkage of environment and labour to trade, and the possibility of binding commitments with little clarity on the benefits in return, especially since IPEF does not involve market access, were key variables in India’s decision.But the door for future collaboration on trade pillar remains wide open, the minister indicated.
“India, while continuing to engage with the trade track in the IPEF, will wait for the final contours to be decided before we formally associate with the trade track. Observers will participate in the discussion with an open mind and in the best interests of the people and businesses of India.”
It would be wrong to compare India’s decision to stay out of the Regional Comprehensive Economic Partnership with its current decision not to join trade pillar under IPEF, said a person familiar with the development.
“It is a totally different context. That was a trade pact with market access issues which would have given China unprecedented penetration in the Indian market. IPEF is a much wider economic framework where trade is just one pillar. That involved a country with which we have a problem,” the person said, seeking anonymity. “Here, we are dealing with friends, discussions have been cordial, we will continue to talk to our American friends and others.”
India’s decision has not led to any acrimony, the person added. It is was important to remember that this was just the first ministerial and the onset, not the conclusion, of the process; and it would be wrong to judge India’s commitment to trade on this decision. “We have just signed two trade pacts. We are negotiating so many more,” the person pointed out. “It’s important to keep some perspective here.”
HT had first reported in May that IPEF will allow countries to pick and choose pillars, and then reported this Friday that India will opt for three pillars while staying out of trade for now.