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Mahatma’s ‘talisman’ used to ward off RCEP threat
Commentary

Mahatma’s ‘talisman’ used to ward off RCEP threat

Ajayan

And finally it happened, much to the relief of farmers, with Prime Minister Narendra Modi declining the Regional Comprehensive Economic Partnership (RCEP) deal. Modi invoked the Mahatma. "Neither the talisman of Gandhiji nor my own conscience permits me to join RCEP," he said. This also makes the Father of the Nation more relevant at a time when his assassins have attained levels of 'sainthood'.

The Gandhiji charisma was used for the pullout as in fact the poor state of Indian economy would have turned worse had India decided to go ahead with the deal.

The death knell for the farming sector, especially plantations, started with the first India-ASEAN Free Trade Agreement (FTA) with Sri Lanka in 1998. The numerous other ones after that shoved out  farmers, especially those in Kerala's plantations. Cheap import of rubber, pepper and other spices has resulted in low prices making farming a tough option. Several planters and small farmers have abandoned farming. The scene has been no different in horticulture and pharmaceuticals, to name a few. More FTAs on the way, it is bound to be a disastrous course.

In such a background came the move for RCEP, forcing farmer organisations, trade unions, the Opposition which includes Congress that initiated the FTAs, and the Swadeshi Jagran Manch of the Rashtriya Swayamsevak Sangh to raise an alarm.

More than the latter's pressure, it was the economic scene that forced India to such a step. Sliding growth rate, rising unemployment, falling consumption, issues were galore for the Government. At this juncture any move like the RCEP deal would have been jeopardising.

Launched in 2012, RCEP is a trade pact between the 10-member ASEAN bloc, besides China, Japan, South Korea, Australia, New Zealand and India. It was expected to link around 3.4 billion people and cover about 40 percent of global commerce where China would dominate. Incidentally, China accounts for nearly half of India’s total trade deficit.

China had the advantage with greater access to markets as the US under Donald Trump pulled out of the deal, leaving it with no competitor as such.

The deal would have hit India's dairy sector hard since it would open the way for an easy flow of milk and dairy products from New Zealand and Australia, which export a vast majority of their products.

Statistics has it that small and marginal farmers in the country have less than a hectare and account for less than 25 per cent of the land holding. But these around 10 crore farmers own roughly 50 percent of the cattle here. With income from agriculture unsteady like the old adage of 'gambling in the rains' dairying has been a source of steady income to many of the marginal farmers.

Among India's concerns were shifting the base year for tariff cuts from 2014 to 2019. This was because over the last few years, customs duties on several goods had been hiked.

India also wanted several more items to be brought under an auto-trigger mechanism which could help check a surge in imports, the sudden gush from China.

Issues of bypassing rules of origin have been threatening India under FTAs, like in the case of pepper where cheap products from other countries like Vietnam which are dumped in the domestic market from other countries. Under RCEP, India wanted stricter rules of origin to prevent, mainly Chinese, cheap goods entering through other RCEP member countries.

There were also moves for a better agreement on services trade for a more liberal movement of skilled professionals.

India's assertion, or rather compulsions, is welcome as after the FTAs, the RCEP would have been double whammy for the vast farming community.