[CA/GK/ECON] RCEP

The Regional Comprehensive Economic Partnership is a free trade agreement originally devised to consist of 16 countries across the Asia-Pacific region. The pact looks to drop tariffs and duties between the members so that goods and services can flow freely between them.

RCEP = 10 ASEAN countries + 6 countries

At the RCEP’s administrative core is ASEAN: an intergovernmental grouping of 10 Southeast Asian countries –

1)    Brunei

2)    Cambodia

3)    Indonesia

4)    Laos

5)    Malaysia

6)    Myanmar

7)    The Philippines

8)    Singapore

9)    Thailand and

10)                       Vietnam

It was proposed that the ASEAN bloc will be joined with six dialogue partners:

1)    China

2)    Japan

3)    India

4)    South Korea

5)    Australia and

6)    New Zealand.

[CA] India opts out of RCEP

In the recently held Regional Comprehensive Economic Partnership (RCEP) Summit in Thailand, India decided not to finalize the RCEP trade deal.

India has expressed its concerns over lowering and elimination of tariffs on products from other countries, as it would negatively affect the domestic agricultural and industrial sector.

<<<<Countries in RCEP>>>>

Why India didn’t sign?

Ø Domestic industry and dairy farmers had strong reservations about the trade pact.

Ø India’s trade deficit with the RCEP nations is $105 billion, of which China alone accounts for $54 billion.

Ø The worry is also over Chinese manufactured goods and dairy products from New Zealand flooding Indian markets, hurting domestic interests.

Ø The trade agreement was also seen as being detrimental to the government’s Make in India initiative.

Ø India was looking for specific rules of origin to ensure the trade pact wasn’t abused by non-partner countries and an auto-trigger mechanism to protect it from a surge in imports.

Ø Ecommerce and trade remedies were among other key areas of concern that failed to find satisfactory redressal.

Ø India was also worried about keeping 2014 as the base year for tariff reductions.