Regional Comprehensive Economic Partnership (RCEP)

[op-ed snap] Stay with RCEP

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, ASEAN

Mains level: Impact of joining RCEP on Indian economy as well as foreign policy


Context

Final negotiations of RCEP

  1. The negotiations on the Regional Comprehensive Economic Partnership, among 16 Asian and Pacific Ocean countries, have entered a decisive phase
  2. Most potential member-countries of the grouping would like to see a “substantive agreement” on the trade deal by the end of this year
  3. At a meeting in Singapore countries which still have issues with the outline of the agreements reached so far may be told politely to step aside and allow a smaller group to go ahead with finalising the RCEP

Future for India

  1. India is among the countries that will have to take a call at this point
  2. India’s concerns with RCEP negotiations thus far are manifold, but some have been addressed

India’s concerns

  1. The first is the greater access Chinese goods will have to the Indian market, a problem given India’s massive trade deficit
  2. The second concern is about demands by other RCEP countries for lower customs duties on a number of products and greater access to the market than India has been willing to provide
  3. The more developed RCEP countries such as Australia and Singapore have been unwilling to accommodate India’s demands to liberalise their services regime and allow freer mobility of Indian workers

Way forward

  1. Despite these concerns, the government must take into account the deeper strategic pitfalls of either slowing down India’s RCEP engagement or walking out of the talks at this stage
  2. Doing so would cut India out of the rule-making process for the RCEP and give China further space in the regional trade and security architecture
  3. It would also be a sharp departure from India’s “Act East” slogan and its extended outreach to ASEAN
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