The Regional Comprehensive Economic Partnership is the free trade agreement (FTA) being negotiated under the ASEAN (Association of South East Asian Nations).
It includes 10 ASEAN members and 6 FTA partners of ASEAN (India, China, Japan, South Korea, Australia and New Zealand).
[The ASEAN member countries are Thailand, Indonesia, Malaysia, Singapore, Philippines, Vietnam, Brunei, Myanmar (Burma), Cambodia, Laos.]
What is the recent decision?
Leaders of the ASEAN have committed to conclude negotiations for the RCEP free trade agreement by the end of 2019.
Some like the Malaysian Prime Minister suggested that countries not ready to join the RCEP could join it at a later date.
This, in particular, includes India along with Australia and New Zealand.
Such a move would allow a smaller 13-member RCEP to go ahead.
However, other leaders insist that all 16 members must agree on the final RCEP document.
In this line, it was agreed in the summit to send a three-member delegation to India to take forward the talks.
What is India’s stance?
Six years into negotiations on the finalization of RCEP, India’s continuing concerns include -
opening its markets for cheaper goods from countries like China and South Korea
ensuring that RCEP countries open their markets for Indian manpower (services)
India has a trade deficit with as many as 11 of the 16 RCEP countries.
Also, India is the only one among them that is not negotiating a bilateral or multilateral free trade agreement with China at present.
So, negotiators have agreed to India’s demand for differential tariffs for its trade with China vis-à-vis the others.
But India has also made tagging the “Country of Origin” on all products a point of contention in RCEP negotiations.
Despite these concerns, India has reiterated its commitment to making RCEP work.
What lies ahead?
India's Commerce Ministry has begun consultations with stakeholders from industries in this regard.
It has engaged think tanks and management institutes to develop a consensus in favour of signing the RCEP.
In the coming days, India will have to keep up intense negotiations to materialize RCEP.
Importantly, there are global uncertainties and challenges to multilateralism and the international economic order today.
So making RCEP function would show India’s standards in regional trade and investment potentials, which are key for economic growth.
