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.
- Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement (FTA) between –
- The 10 members of ASEAN
- Additional members of ASEAN +3 = China, Japan, South Korea
- 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 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.