ASEAN member countries of RCEP offer India concession

Note4students

Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: RCEP, TPP etc.

Mains level: How India will gain from being a part of RCEP


News

Encouraging India for RCEP

  1. Several Asian member countries of the proposed RCEP have offered India a significant concession on the extent to which it needs to open up its markets.
  2. India can open up 83% of its market against the earlier 92%.

Quick Recap of RCEP

  1. The RCEP is a proposed trade agreement between the 10 Association of Southeast Asian Nations (ASEAN) countries and their six free trade agreement partners, namely Australia, China, India, Japan, Korea, and New Zealand.
  2. The grouping would comprise 25% of global GDP, 30% of global trade, 26% of FDI flows, and 45% of the population.

Scope for bilateral agreements with China

  1. India is concerned about further opening its market to China and skewing the trade deficit between them further.
  2. However the RCEP allows for bilateral agreements also to be made so India can perhaps open up to China gradually and not in one go.

India’s successful negotiations so far

  1. India has achieved some success regarding some of its other concerns, such as getting the other RCEP countries to liberalize their services markets and allow for a more free movement of service sector professionals.
  2. India stands to gain a lot from joining RCEP at a time when so much trade is being diverted from China because of the ongoing trade tensions with the U.S.

Hurdled by Elections

  1. India along with Indonesia and Australia are also due to go to elections in 2019.
  2. It is unlikely that these countries would make a decision before the general elections in 2019, even though the RCEP countries have set a December 2018 internal deadline for the “substantial outcomes”.
  3. India and a few other countries want only a statement on substantial progress to be made during the summit, and for negotiations to be pushed till next year.
  4. This adds to the urgency of concluding the RCEP negotiations as it makes it harder for governments to give any concessions on tariffs and subsidies closer to polls, given political compulsions.
Regional Comprehensive Economic Partnership (RCEP)
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