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RCEP
Why is it in the news?
- As per the official statement from government, it would be “premature” to suggest that India could be cut out of the Regional Comprehensive Economic Partnership (RCEP) being negotiated by 16 countries led by the ASEAN bloc, if it doesn’t agree to join it by the year-end.
- The statement comes after the Malaysian Prime Minister Mr. Mahathir said he would prefer to go ahead with a formulation of 13 countries that are willing to go ahead immediately, and allow outliers India, Australia and New Zealand to join the pact at a future date.
More in the news
About RCEP:
- RCEP is a proposed free trade agreement (FTA) or comprehensive regional economic integration agreement between the 16 Asia-pacific countries.
- It includes 10-ASEAN countries and its six FTA partners (Australia, New Zealand,India, China, Japan and Korea).
- The grouping includes more than 3 billion people, a combined GDP of about $17 trillion, and accounts for about 40% of world trade.
Significance:
- RCEP is a strategy aimed at maintaining regional growth by ensuring the markets of participating countries remain open and competitive.
- If negotiated successfully, RCEP would create the world’s largest trading bloc and have major implications for Asian countries and the world economy.
Concerns:
- The presence of China, with which India had a $63 billion trade deficit in 2017-18, is the biggest worry.
- Granting greater market access to China under RCEP would mean more trouble for India’s labour-intensive domestic industry.
- The other 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.
Source
The Hindu.