UPSC Online Editorial Analysis

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Editorial – 1

Title of the editorial: Threat or treat: on RCEP trade deal (The Hindu) | Seize the deal (The Indian Express) | Explained: The China factor and India’s strategic thinking on RCEP | Explained: India out of RCEP, trade angle | Other sources.

Topic in syllabus: Bilateral, regional and global groupings and agreements involving India and/or affecting
India’s interests. (GS-2)

Analysis about: This is a comprehensive analysis of the RCEP & India.

Introduction:

• The Regional Comprehensive Economic Partnership (RCEP) was signed into existence on Sunday by 15 countries led by China, Japan, South Korea, Australia, New Zealand and the 10-state ASEAN grouping, creating one of the world’s largest trading blocs.
• Noticeable by its absence was India, which after seven years of protracted negotiations decided last November to exit the grouping.
• Even as India opted to stay out after walking out of discussions last year, the new trading bloc has made it clear that the door will remain open for India to return to the negotiating table.

About recently signed agreement (RCEP):

• RCEP was originally being negotiated between 16 countries — ASEAN members and countries with which they have free trade agreements (FTAs), namely Australia, China, Korea, Japan, New Zealand and India.
• The purpose of RCEP was to make it easier for products and services of each of these countries to be available across this region.

Why did India walk out?

• India had been “consistently” raising “fundamental issues” and concerns throughout the negotiations and was prompted to take this stand as they had not been resolved by the deadline to commit to signing the deal.
• Its decision was to safeguard the interests of industries like agriculture and dairy and to give an advantage to the country’s services sector.
• India wants to ensure that RCEP countries open their market for Indian manpower but some countries having strict migration laws.
• RCEP proposed that 90% of the trade items should be free from tax but India having trade deficit with 11 of the RCEP countries.
• India was unable to ensure countermeasures like an auto-trigger mechanism to raise tariffs on products when their imports crossed a certain threshold.
• It also wanted RCEP to exclude most-favoured nation (MFN) obligations from the investment chapter.
• India felt the agreement would force it to extend benefits given to other countries for sensitive sectors like defence to all RCEP members.
• India’s fears that there were “inadequate” protections against surges in imports.
• The china factor:
  • China is dominating the RCEP trade bloc.
  • Trade data suggests that India’s deficit with China, with which it does not have a trade pact, is higher than that of the remaining RCEP constituents put together.
  • Indian is afraid of opening the market for the countries like china which may harm the local manufacturers.
  • Escalating tensions with China are a major reason for India’s decision.
  • The various measures India has taken to reduce its exposure to China would have sat uncomfortably with its commitments under RCEP.
  • Major issues that were unresolved during RCEP negotiations were related to the exposure that India would have to China.

How India took the decision to stay away from the deal?

• India’s stance on the deal also comes as a result of learnings from unfavourable trade balances that it has with several RCEP members, with some of which it even has FTAs.
• An internal assessment by the government has revealed that the growth in trade (CAGR) with partners over the last five financial years was a modest 7.1%.
• The “utilisation rate” of FTAs both for India and its partners has been “moderate” across sectors, according to this study, which covers pacts with Sri Lanka, Afghanistan, Thailand, Singapore, Japan, Bhutan, Nepal, Republic of Korea and Malaysia.

Reason in favour of India to join RCEP & What can the decision cost India?

There are concerns that India’s decision would impact its bilateral trade ties with RCEP member nations, as they may be more inclined to focus on bolstering economic ties within the bloc.

• The move could potentially leave India with less scope to tap the large market that RCEP presents.
• India’s decision could impact the Australia-India-Japan network in the Indo-Pacific.
• It could potentially put a spanner in the works on informal talks to promote a Supply Chain Resilience Initiative among the three (Australia-India-Japan).
• By staying out, India has blocked itself from a trade bloc that represents 30 per cent of the global economy and world population, touching over 2.2 billion people.
• With global trade and the economy foundering on the shoals of the COVID-19 pandemic, especially as new infections in Europe and the U.S. prompt fresh restrictions there, the pre-eminence of the east Asian and Pacific countries including China, South Korea, Vietnam, Australia and New Zealand serving as a bulwark in containing the pandemic and re-energising economic activity can hardly be understated.
• Add to this the heightened tariff uncertainty generated by the deadlocked Brexit negotiations between Britain and the E.U., and it becomes evident that India may have missed a vital opportunity.
• RCEP members now account for about 30% of the global GDP and a third of the world’s population, the signatory states were emphatic that the timing of the accord presents a unique opportunity to support their economic recovery, inclusive development and job creation even as it helps strengthen regional supply chains.
• Vietnam and the Philippines, which not only continue to have their share of disputes with Beijing but also suffer significant trade imbalances with Asia’s largest economy.
• That these and other larger nations in the grouping have chosen to bury their geopolitical differences with China in order to prioritise what they collectively see as a mutually beneficial trading compact that would benefit their economies over the longer term is the clearest testament to economic realism trumping nationalist politics.
• The summary of the final agreement shows that the pact does cover and attempt to address issues that India had flagged including rules of origin, trade in services, movement of persons and, crucially, remedies and safeguards.

Views of Prof. Alok Bansal (director of India foundation & prof. at NDIM) In favour of India with RCEP:

• There is a tendency amongst many in India to undermine the entrepreneurial skills of Indians. When import access was given to Chinese goods, it did not eliminate Indian industry.
• Of course, some industries which are uneconomical, have not modernised and imbibed new technologies will fall by the way side.

• More significantly, opening up markets and reducing tariffs will benefit consumers. The automobile, telecom and even IT boom would not have been feasible without liberalisation. Similarly, the recent spurt in solar power generation is directly a result of the availability of cheap imported solar films.
• By entering RCEP, India may be able to get greater market access to even China as it is vulnerable due to its ongoing trade war with the US.
• More significantly, with China facing the demographic crunch, India could easily edge it out.
• India’s presence in this trading block could lead to a large number of multinationals shifting their production facilities from China to India, as that would enable them to access Chinese markets, without being present there, to comply with US sanctions.
• RCEP is nothing but a natural follow up of India’s Act East policy.
• India’s main strength lies in the services sector and it must therefore, ensure that RCEP includes unbridled access for Indian service providers as well as a liberalised visa regime for people working in these fields.
• Similarly, protection will need to be ensured for some sensitive industries crucial for national security.
• Some temporary protection may be required for certain sectors of agriculture, crucial for food security.
• RCEP is one sure shot way of forcing China to provide a level playing field.
• India has the largest arable land and one of the largest pool of scientists, engineers, technicians, so there is no reason for India to be concerned.
• This is also one way of controlling China and keeping it in check.
• In a big grouping like this, China is unlikely to have its way, nor is it going to antagonise everyone.
• India’s absence from RCEP will virtually handover this significant grouping to China, which is certainly not in India’s interest.

Views of V.S. SHESHDRI (Former ambassador) – Why India Should join RCEP:

• Almost all members of RCEP are members of the APEC and are participants in its various initiatives.
• In particular, the trade and investment facilitation action plans of the APEC have seen transformational results.
• Peer pressure among others significantly helped these economies in reducing transaction costs and improving their position on indices such as logistics or in ease of doing business.
• Even their negotiators are far more familiar with each other’s policies and practices.

What are India’s options now?

• India, as an original negotiating participant of RCEP, has the option of joining the agreement without having to wait 18 months as stipulated for new members in the terms of the pact.
• RCEP signatory states said they plan to commence negotiations with India once it submits a request of its intention to join the pact “in writing”, and it may participate in meetings as an observer prior to its accession.
• India currently has agreements with members like the ASEAN bloc, South Korea and Japan and is negotiating agreements with members like Australia and New Zealand.

Why the decision is not that worrying?

• When India chose to stay out of the Belt and Road Initiative in 2017, there was much commentary that New Delhi might be isolating itself. Three years later, India’s position has been recognised by like-minded democracies, and many have said that India’s decision was prescient.
• India currently has agreements with members like the ASEAN bloc, South Korea and Japan and is negotiating agreements with members like Australia and New Zealand.
• It would serve India’s interest to invest strongly in negotiating bilateral agreements with the US and the EU, both currently a work in progress.
• For India, RCEP hardly makes a difference as it has FTAs with ASEAN, and CEPAs (Comprehensive Economic Partnership Agreements) with Japan and South Korea already.

The way forward:

• In favour of – India with RCEP:
  • Being an emerging power, New Delhi must send the right messages. Instead of sitting out and building tariff walls across sectors, it must prod and incentivise the industry to be competitive, and get inside the RCEP tent at the earliest opportune moment.
  • Acknowledging India’s economic heft and value as a market, the RCEP members have not only left the door open should New Delhi reconsider its stance but have also waived a key 18-month cooling period for interested applicants. It would be in India’s interest to dispassionately review its position and embrace openness rather than protectionism.
• Against – India with RCEP:
  • “You don’t get into FTAs merely to provide your market to your partner countries. While you accommodate your partner countries, your objective is also to increase the presence of your products in the markets of your partners, and India hasn’t been able to achieve the latter objective,” said trade expert Biswajit Dhar, professor at JNU’s Centre for Economic Studies and Planning. (Hence it is good to stay away from the deal that is what professor suggests)

Editorial – 2

Title of the editorial: Needed, a policy framework in step with technology

Topic in syllabus: Science and Technology (GS-3) | Governance (GS-2)

Analysis about: This editorial talks about how the rapid pace of the evolution of technology is useful to take a holistic view of schemes of government.

Importance of data:

• The expansion of computing power has driven the pace of information gathering and analysis.
• Information is the new currency powering economies.
• The new currency drives processes and decision-making across a wide array of products and services, making them more efficient and value accretive for consumers.

How technology is blurring the boundaries between different traditional compartments?

• A modern automobile has 40% of its component value from electronic-based products and a modern electric vehicle has close to 100 million lines of code, which is more than that used by a Boeing 787 or the Chrome browser.
• Even if you look at a conventional “metal-based” industrial product, information and electronics are becoming all-pervasive.

How government departments are working in silos?

• If you look at the automobile industry, policies are governed by the Heavy Industries and the Surface Transport Ministries, respectively.
• However, increasing electronification and digitisation of the automobile are not covered by industrial policies that govern the Electronics and Information Technology Ministry.
• Another example involves drones that could serve different sectors, including agriculture, and
  would require a lot of inter-departmental clearances outside of the Department of Agriculture.

What is necessary?

• This departmentalisation of policies is facing a challenge from technology that very often blurs the boundaries served by different policies.
• There is a need to have a holistic view of policies for economic development as technology is becoming a significant enabler in most industries.
• A change in policy framework regarding economic development that enables various ministries to work together is essential.
• A sufficiently empowered policy clearing cell could ensure a holistic view on policy across departments of government, at the State and the Centre.
• In terms of attracting investments, policies have always been driven by subsidies and incentives. A
  nourishing ecosystem for industry, including the hard infrastructure and softer areas such as education, skilling, technical institutions, laboratories, testing centres, etc., has to be cultivated.
• The creation of clusters of companies in adjacent but complementary areas could constitute such an
  ecosystem that encourages multi and cross-disciplinary learning and spur innovation and economic development.
• Traditional manufacturing companies, whether it be software, research and development or even servicing of products, are not adequately covered in industrial policies. It is important to include these to encourage innovation and technological development.
• In this evolving policy framework, it is important that there is close cooperation and alignment between the Centre and State to ensure effective implementation on the ground.

Editorial – 3

Title of the editorial: Unabating attacks on journalists

Topic in syllabus: Ethics – accountability and ethical governance (GS-4) | Polity – F.R. – freedom of speech & expression. (GS-2) | Internal security (GS-3)

Analysis about: This editorial emphasises on urgent need to enact laws that protect media persons and provide accountability.

Examples of attack on journalists:

• Isravel Moses, a 26 ­year­old television journalist who reported on illegal encroachment of land and sale of ganja, was hacked to death in Nallur village in Kanchipuram district of Tamil Nadu on November 8.
• A journalist, 35 ­year ­old Syed Adil Wahab, was found brutally murdered in a jungle on the outskirts of Bhopal.

The global scenario:

• According to the United Nations, “Journalism is one of the most dangerous professions in the world”.
• Between 2006 and 2019, over 1,200 journalist have been killed the world over. On an average, it is estimated that one journalist is killed every four days.
• Sadly, in just one out of every ten such cases, the killers get convicted, while the rest go scot-free.
• In 2009, as many as 32 journalists were killed in Philippines; ten were killed in Afghanistan in 2016, and ten journalists were among those killed in a suicide bomb attack in Kabul in April 2018.

The Indian scenario:

• A report released by an NGO last year states that 40 of the 198 journalists attacked in India between 2014 and 2019 died due to the attack.
• The killing of journalists is more rampant in smaller towns, while the figures in metro towns are quite low.
• Press Council of India (PCI) records indicate that 96% of the cases of attacks on journalists end up without conviction.

What is necessary?

• That there is a need for stringent laws to protect journalists hardly calls for emphasis.
• Towards this end, Maharashtra has emerged as the first State in the country to enact a law.
  Under the Maharashtra Media Persons and Media Institutions (Prevention of Violence and Damage or Loss to Property) Act, 2017, any attack on journalists would be non­bailable
  and cognisable, and would be investigated by an officer not below the rank of Deputy Superintendent of Police.
• Chhattisgarh is in the final stages of enacting a law known as Chhattisgarh Protection of Media persons Act.
• While these two States have taken the initiative to enact laws to protect journalists, other States have to follow.

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