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As 15 Asia Pacific Countries Sign RCEP, India Chooses to Sit Out


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Last week, ten south-east Asian countries along with Japan, China, South Korea, Australia and New Zealand signed the Agreement on Regional Comprehensive Economic Partnership (RCEP) making it the world’s largest trade bloc. Initially projected as the alternative to Trans Pacific Partnership, the negotiations for this free trade agreement (FTA) were underway since 2012 and after 31 rounds (as per Wikipedia), the member states finally sealed the deal four days ago via a video conference. While some reports suggest that the economic benefits of the RCEP are modest and will take years to materialize, others project it as Asia’s push back against the prevailing trend of global protectionism. According to Peter A. Petri and Michael Plummer’s report for Brookings, these benefits could translate to adding 209 billion dollars to world income annually and contributing 500 billion dollars to world trade by 2030. 

As noted in earlier posts, the RCEP Agreement also contains a dedicated chapter on prevention and enforcement of IP rights of the member states. Much has been written on the blog about this chapter here. The chapter seeks to grant protection to patents, trademarks, copyrights, industrial designs, geographical indications, genetic resources, traditional knowledge and folklore and against unfair competition. While commentary on the chapter would require a detailed look at how it has changed etc since our last posts on it, one of the provisions (Article 11.8) is worth mentioning here. This provision expressly declares that the Agreement shall not hinder the utilisation of Article 31bis of the TRIPS Agreement. There seem to be at least some basic public health safeguards in the text and this may possibly reflect India’s participation earlier on in the process, as written in Swaraj’s post here. Article 11.8 effectively ensures that Article 31bis of TRIPS should be given priority over the other provisions of RCEP, if and when any conflict arises. Therefore at the first glance it seems like the Agreement respects some of the TRIPS  flexibilities, however, a more detailed analysis is required to assess how does the Agreement fares in addressing the issues regarding incorporation of TRIPS flexibilities and TRIPS plus provisions. Side note: Prof. Peter K. Yu, in the past, has analysed the draft IP provisions of the RCEP Agreement as they were, here. Readers who may be interested to analyse how far this chapter has come from the draft may find the piece interesting to read. 

Apart from perhaps evidencing the rise of east-Asian economies in the global trade regime and China’s increasing influence in world politics, RCEP is also notable for the last minute withdrawal of India from the negotiations back in November 2019. India’s concerns, which eventually led to its withdrawal from the agreement, were surrounding the provisions on equitable market access, the rules of origin, dispute settlement mechanisms and most notably the impact this agreement will have on the vulnerable sectors like agriculture. Notably, India was concerned about opening up its vulnerable sectors like agriculture to compete directly against the imports from the likes of Australia and New Zealand will ultimately hamper its domestic industries severely. Regardless, RCEP members have sent a formal statement showing willingness to commence negotiations with India even after the signing, provided India submits a written intention to accede to the RCEP Agreement. 

However, it doesn’t seem like India is eager to accede to the Agreement any time soon. Just a day after the RCEP signings, India’s Foreign Minister, Mr. S. Jaishankar remarked that “The effect of past trade agreements has been to deindustrialise some sectors. The consequences of future ones would lock us into global commitments, many of them not to our advantage. Those who argue stressing openness and efficiency do not present the full picture” stressing that India is not “turning its back on the world” but is rather strengthening itself. While it may seem alarming (as pointed out here and here) that India will be missing out from becoming a part of the world’s biggest trade bloc, many believe (see here and here) that India has legitimate reasons to stay away from the RCEP. Whatever, one may speculate now, only time will tell whether the decision to not board the RCEP bus will be favorable for India or not.

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