Regional Comprehensive Economic Partnership (RCEP)

China-led RCEP takes off without India

Note4Students

From UPSC perspective, the following things are important :

Prelims level : RCEP

Mains level : RCEP and its economy

The Regional Comprehensive Economic Partnership (RCEP), a mega trade bloc comprising 15 countries led by China has come into existence.

Try answering this:

Q.Signing the Regional Comprehensive Economic Partnership (RCEP) agreement would have given more substance to India’s Act East policy. Analyse.

About RCEP

  • Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement (FTA) between –
  1. The 10 members of ASEAN
  2. Additional members of ASEAN +3 = China, Japan, South Korea
  3. Members with which ASEAN countries have FTA = Australia, New Zealand
  • The group is expected to represent at least 30% of the global GDP and will emerge as the largest free trade agreement in the world.
  • It includes more than 3 billion people, has a combined GDP of about $17 trillion, and accounts for about 40 per cent of world trade.

India’s reluctance

  • India’s ties with China in recent months have been disturbed by the military tension in eastern Ladakh along the LAC.
  • In the meantime, India has also held a maritime exercise with Japan, Australia, and the United States for the “Quad” that was interpreted as an anti-China move.
  • However, these moves did not influence Japanese and Australian plans regarding RCEP.

 Leverage for China

  • Despite the pandemic, the RCEP is certainly leverage for China and shows the idea of decoupling from China is not a substantive issue in a regional sense.
  • The agreement means a lot for China, as it will give it access to Japanese and South Korean markets in a big way, as the three countries have not yet agreed on their FTA.
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