India won’t re-join the China-dominated Regional Comprehensive Economic Partnership (RCEP) pact but will rather seek to expedite trade talks with large markets like the US and the EU, senior government officials told FE, a day after 15 nations clinched the biggest trade deal, while leaving the door open for New Delhi to re-enter.
The country will refrain from joining any pact that is effectively “free trade agreement (FTA) by stealth with China”, one of the officials said, making clear New Delhi’s anxiety over joining back the RCEP bloc. The focus is on not just free but also fair trade, he added.
Moreover, as reported by FE on June 24, while fears of massive Chinese dumping had always persisted, Beijing’s belligerence at the borders, especially the Galwan clash, just hardened New Delhi’s intent to stay away from RCEP talks.
India’s decision comes at a time when Joseph R Biden’s election as the 46th American President has revived the prospect of the US’ re-entry into the ambitious Trans-Pacific Partnership (TPP) trade deal with 11 others. Any such move, on top of the RCEP deal, will pressure New Delhi to redraw its trade ties to avoid being left behind in integrating with global supply chain, analysts have said.
India and the US were close to clinching a “limited” trade deal that was expected to cover an annual trade of over $13 billion, or roughly 15% of bilateral shipments. However, with Biden at the helm now, the deal may be delayed, as the US may now seek to review the broad contours of even the settled issues. The two countries also had plans to launch talks for a broader FTA once this deal was signed.
India was also open to the idea of a preferential trade agreement with the EU to get faster outcomes before hammering out a more ambitious free trade agreement (FTA) that is being negotiated since 2007, commerce and industry minister Piyush Goyal had said last month.
The RCEP (with India) was meant to encompasses less than a third of global gross domestic product (GDP), while the TPP, with the US, was to cover 40% of it. Interestingly, as many as six countries— Australia, Japan, Malaysia, New Zealand, Singapore and Vietnam —feature in both the mega trade deals. The TPP, negotiated by the Obama regime and rejected by Donald Trump, was an attempt at countering China’s growing clout in world trade.
India had pulled out of the RCEP talks in Bangkok on November 4 last year and made its return incumbent on adequate redressal of its concerns. New Delhi was unwilling to budge on its demands for an “auto-trigger” mechanism for safeguarding its industry from dumping, and strict rules of origins of imported products to check the abuse of tariff concessions.
Also, New Delhi was steadfast in certain demands, including credible steps and market access to address India’s $105-billion trade deficit with RCEP members, change in the base year to implement the tariff abolition from 2014 to 2019 and a more balanced deal on services.
Earlier in February, India had skipped a meeting in Bali where its concerns on the mega regional trade deal were sought to be discussed. New Delhi had reportedly received another invitation in April to join the talks. India’s decision to refrain from talks had come in the wake of China showing no flexibility in its negotiating positions.
Even without RCEP, India’s merchandise trade deficit with China stood at $53.6 billion in FY19, or nearly a third of its total deficit, and $48.7 billion in FY20, even without factoring in the deficit with Beijing-proxy Hong Kong.
SOURCE: The Financial Express
The Clean Clothes Campaign (CCC) workers' rights group has launched a global week of action to pressure brands into signing up to a wage assurance scheme that guarantees supply chain workers are paid in full during the pandemic.
The CCC says its Pay Your Workers campaign is targeted particularly at H&M, Primark and Nike - all of which it says recently returned to profit - and calls on brands to take responsibility for the vulnerable workers who make their clothes.
During the week of action, activists aim to bring the voices of garment workers from countries such as Myanmar and Indonesia to Europe and North American by projecting their images onto buildings, chalking their statements on pavements, and hiding their notes inside stores.
Eastman, the producer of sustainably sourced Naia™ cellulosic fiber, introduces its new Naia™ Renew portfolio, sourced from 60% wood pulp and 40% recycled waste plastics. Naia™ Renew cellulosic fiber is traceable with certified biodegradability that captures the value of hard-to-recycle materials that would otherwise be destined for landfills. It can be produced at scale to deliver sustainability without compromise to the fashion world.
“Naia™ Renew enables a circular economy for the fashion industry and helps brands meet their eco-conscious goals,” said Ruth Farrell, global marketing director of textiles for Eastman. “We’re transforming what a fabric can be and do to meet the sustainability demands of our customers and to create a world where brands and consumers can be in fashion without compromising on quality and performance.”
Available as both a filament yarn and a staple fiber, Naia™ Renew offers clear advantages over other materials. Naia™ Renew filament features a silky hand, rich luster and fluid drape and is used to create fashionable womenswear garments, while Naia™ Renew staple fiber is inherently soft and quick drying, with reduced pilling properties, making it ideal for everyday casual wear.
Fully circular, Naia™ Renew is produced with a low carbon footprint in a closed-loop process where solvents are safely recycled back into the system for reuse. The fiber is made from wood pulp sourced from certified forests, and the recycled plastics feedstock is generated via Eastman’s patented carbon renewal technology (CRT). CRT is an integrated, molecular recycling technology that breaks down waste plastics, such as post-consumer carpet fiber and plastic packaging materials into basic molecular building blocks for the manufacture of new products including fibers– a truly circular solution creating value from waste.
Naia™ is actively collaborating across the value chain for Naia™ Renew and will have announcements regarding brand partnerships soon. “Our vision is to make sustainable fashion accessible for everyone” Farrell added. “We all need to play our parts to help fix the future and work together to protect our planet’s precious resources for the next generations. With Naia™ Renew, you can take an active role in conserving resources and fostering innovation, while demonstrating a passion for sustainability that resonates with consumers worldwide.”
Bangladesh is set to put forward some proposals including seeking relaxation of Asia Pacific Trade Agreement (APTA) rules of origin during the ensuing Foreign Office Consultation (FOC) meeting, officials said.
The Bangladesh side will also request Chinese entrepreneurs to set up joint venture industries in Bangladesh, they added.
Other proposals to be placed before the meeting include setting up of a design institute in the leather sector and a fashion design institute in the readymade garment (RMG) sector etc., they mentioned.
The commerce ministry has recently submitted some proposals to the foreign ministry for placing them at the upcoming FOC meeting between Bangladesh and China.
"Bangladesh has been suffering from a continuous trade imbalance over the years. In order to trim down the existing trade imbalance between the two countries, we have given some talking points to the ministry concerned for placing the proposals at the next FOC meeting," a high official of the commerce ministry said.
The commerce ministry suggested requesting China to relax the APTA Rules of Origin and Rules of Origin of Zero Tariff Treatment for Bangladesh in the form of 25 per cent value addition (ad valorem percentage) instead of 40 per cent in processed products, according to the talking points.
It has also made request to persuade the Chinese investors to set up joint venture industries in the fields of country's leather goods including shoes, IT, light engineering, agro-processing foods, shipbuilding, high value added textile products.
The ministry suggested that trade delegations need to visit China and meet their counterparts for assessing the demand, price and quality of products having export potential.
China granted duty-free and quota-free (DFQF) access to 8,549 Bangladeshi products (97 per cent), which may help boost exports while lowering the ballooning bilateral trade imbalance, officials say.
The trade benefit was given by China to Bangladesh as a least developed country (LDC) under the World Trade Organisation (WTO) provisions.
China offered duty-free treatment to the LDCs in July 2010 and Bangladesh used to enjoy the benefit for 60 percent of its tariff lines.
The benefit for Bangladesh came into effect from July 01, 2020, and would continue until the country graduates to a developing country status, slated for 2024.
Simultaneously, Bangladesh will continue enjoying preferential market access to China under the Asia-Pacific Trade Agreement or APTA, which covers 3,700 HS Codes.
Under the facility, Bangladeshi goods will have to ensure value addition of 40 percent while under the APTA the requirement is 35 percent.
To avail of the enhanced benefit, Bangladesh signed a letter of exchange in 2019 and sent it to China for its response. After a long wait, the Chinese finance ministry on June 16 agreed to grant the facility to Bangladesh.
China is the largest trade partner for Bangladesh with annual bilateral commerce totaling over $12.13 billion.
In the fiscal year 2019-20, Bangladesh imported goods worth over US$11.53 billion from China and exported goods over US$ 600 million.
The country's trade gap with China stood at nearly US$ 11 billion in the last fiscal year (FY20), according to the statistics of the ministry.
The Bangladesh-China FOC is likely to be held in Dhaka soon.
The FOC will review various global, regional and sub-regional issues of mutual interests. Issues of bilateral cooperation will also be discussed.
SOURCE: The Financial Express, Bangladesh
India’s factory output barely grew in the month of September while China’s IIP recorded a nine-month high level of 6.9 percent in the month. China maintained the same level of industrial output in the month of October as well and this was also exactly the pre-Covid level in the month of December 2020 for China’s IIP. The disparity in the industrial growth of both nations is when India is trying to catch the bus of investors and manufacturers willing to move the base out of China. India’s industrial growth took a strong blow from the coronavirus pandemic and kept contracting for six months consecutively till August 2020. The contraction was as deep as 57.3 percent in April 2020.
However, the worry for India’s business cosmos is not only the subdued level of factory output but also the rising inflation rate. The retail inflation rose to 7.61 percent in October, which is the highest rate since May 2014. “The IIP is almost flat at 0.2 percent while the price level too is rising. To sustain the early gains in recovery control of the price level is critical,” said Joseph Thomas, Head of Research – Emkay Wealth Management.
It is also to be noted that while China just had a single pain of recovering from the disruptions caused by the coronavirus pandemic, India was hit by the double-edged sword of the pandemic and the prolonged slowdown. The weak fundamentals of India’s manufacturing landscape presented comparatively a larger amount of vulnerability. For the seven months till September 2020, India’s manufacturing production growth kept on shrinking. Even as the IIP grew 0.2 percent, the manufacturing production further slid by 0.6 percent.
Meanwhile, China’s retail trade rose by 4.3 percent on-year in October 2020, which was the biggest increase since December last year. The consumption also continued to recover from the Covid-19 shock, with sales rising for almost all categories.
SOURCE: The Financial Express
India is considering a plan to allow up to 26% foreign direct investment from countries with which it shares a land border, including China, without government scrutiny for some sectors, the Economic Times reported on Tuesday, citing government officials.
In April, India had stepped up scrutiny of investments from companies based in neighboring countries, in what is widely seen as a move to stave off takeovers by Chinese firms during the coronavirus outbreak.
The Indian government’s April 17 notification had said investments from an entity in a country that shares a land border with India will require government approval, meaning they can not go through a so-called automatic route.
The Economic Times report said that a panel of top government officials was discussing various options on easing rules for investment from neighbours and a decision is likely soon.
The commerce and industry ministry did not immediately reply to an email from Reuters seeking comment.
Tensions between India and China remain high with tens of thousands of troops deployed along the remote Himalayan border, even as the two countries are formulating a plan to end months of military standoff.