The Regional Comprehensive Economic Partnership (RCEP) is a multilateral free trade agreement (FTA) between Australia, China, Japan, New Zealand, South Korea and the member states of the Association of Southeast Asian Nations (ASEAN, consisting of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam). The 15 Member States represent about 30% of the world`s population and almost 30% of the world`s gross domestic product (GDP). As a result, RCEP is the world`s largest free trade framework, replacing the European Union (EU), the United States, Mexico and Canada Agreement (USMCA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP or TPP-11). Given that the Indian economy is plagued by trade deficits and the COVID-19 pandemic, it is unlikely that New Delhi will join RCEP at this time or at this time. But Indian analysts have also suggested that the Indian government should consider a return to RCEP in the future. For example, Jagannath Panda, a researcher and coordinator of the East Asia Center at the Manohar Parrikar Institute for Defense Studies and Analysis, argued that India`s return to RCEP is “politically and economically desirable” for all affected countries, stressing that “the urgent conditions created by the coronavirus should encourage India to have a new perspective on return. RCEP is an inclusive model that should not overlook India`s interests or the benefits of RCEP. The Comprehensive Economic Partnership Agreement (CEPA) between Japan and India entered into force in 2011, but India had trade deficits due to excessive Japanese exports. In 2018, India`s trade deficit with other RCEP member states was $108.5 billion (China for $57.3 billion and ASEAN for $21.1 billion). In fact, India faced trade deficits with 11 of the 15 RCEP countries, and the content of the RCEP agreement did not protect the Indian economy.
For this reason, Prime Minister Narendra Modi made the final decision not to join the RCEP, quoting Mahatma Gandhi: “Remember the face of the poorest and weakest man you have seen and ask yourself if this step you are considering will benefit him. Japan had also concluded Economic Partnership Agreements (EPAs) with these 14 countries, as well as with ASEAN: since Indonesian President Yudhoyono is in India, the two countries have pledged to strengthen cooperation in the fight against terrorism by signing an extradition treaty and announcing the opening of free trade negotiations. (25.01.2011) This image from a conference call of the Vietnam News Agency (VNA) shows the heads of state and government and trade ministers of 15 countries of the Regional Comprehensive Economic Partnership (RCEP) for a virtual group photo in Hanoi, Vietnam, on Sunday, September 15. November 2020. Afghanistan has bilateral agreements with the following countries and blocs:[1] India is the 12th country to sign a free trade agreement with Japan, and the largest by economy to date. Despite the size of their economies, Japan and India had limited trade, which amounted to about $15 billion in 2010, or only one percent of Japan`s global trade. This is a list of free trade agreements between two parties, where each party could be a country (or other customs territory), a trading bloc or an informal group of countries. Japan on Friday ratified the Regional Comprehensive Economic Partnership (RCEP), a free trade agreement between China, Australia and the Association of Southeast Asian Nations. From a long-term perspective, it would be politically, economically and strategically important for India to join the RCEP framework. Of course, it makes sense and realistic for the Indian government to minimize its trade deficits and protect its national interests. New Delhi may also need to take the time and measures necessary to protect and revive the domestic industry affected by the COVID-19 pandemic.
Nevertheless, India`s return to the mega-free trade agreement would benefit not only the Indian economy, but also all RCEP member countries. Describes the trade agreements in which this country is involved. Provides resources for U.S. companies to obtain information on the use of these agreements. “Free trade agreements are clearly a very important part of global trade, but care must be taken not to reduce tariffs too much on the import of foreign products,” TP Sreenivasan, India`s former permanent representative to the United Nations, told Al Jazeera. “Because you can be inundated with their products and it hurts the domestic industry.” “It was a mistake to stay out of RCEP,” said Pradeep S Mehta, an experienced business analyst who has served on several World Trade Organization advisory boards. “If the government really changes the course of free trade, it would be welcome. It`s time. It has deposited its instrument of ratification with the ASEAN Secretariat, Kyodo News reported.
Among the main reasons for New Delhi`s decision to withdraw from the world`s largest trade deal are insufficient protection against increased imports, insufficient difference with China, possible circumvention of rules of origin, maintenance of the 2014 reference year, and lack of credible guarantees on market access and non-tariff barriers. Of course, free trade agreements are not necessarily a solution to a country`s trade imbalance. Previous free trade agreements with countries like Japan and Malaysia focused more on goods than services, which are India`s strength, said Debashis Chakraborty, an associate professor at the Indian Institute of Foreign Trade in Calcutta. India and Australia began talks on a free trade agreement in 2011. A decade later, without this agreement, India remains a net importer of Australia. With the United Arab Emirates, things got worse. India was a net exporter until 2019-2020 – now it imports more than it sells to the Middle Eastern country. This growing gap between exports and imports seems to have prompted the government to rethink its approach, analysts say. This will be Japan`s first trade deal involving both China and South Korea – its largest trading partners and third largest. The talks with Australia reflect a broader urgency that many experts say has so far failed the Indian government when it comes to agreeing to free trade agreements and a more open global trade regime. Japan and India will also continue talks on lifting employment restrictions so that Indians can work as nurses in Japan.
Japan is preparing to face increasing health demands as its population ages. Japan is one of the fastest aging countries in the world, and there is concern about taking care of their growing numbers. The Japanese government said it hoped to conclude the talks within two years. All this contrasts with the skeptical view with which Prime Minister Narendra Modi`s government took office in 2014, when it announced a review of all previous free trade agreements signed by India, arguing that some of them had not helped the country. Delhi has free trade agreements with the ten members of the Association of Southeast Asian Nations (ASEAN), Sri Lanka and other bilateral agreements with Malaysia and Thailand. It has a more comprehensive economic agreement with South Korea. India also plans to sign an agreement with the European Union later this year. While there is no evidence that the Indian government is changing its thinking about RCEP, the rush to pass bilateral free trade agreements with a variety of countries indicates the realization that the Modi government`s previous approach did not work. Japan has been conducting ongoing negotiations on a Regional Comprehensive Economic Partnership Free Trade Agreement with several countries since 2012, including: A list of other trade agreements and EPAs concluded by Japan, as well as those under negotiation, can be found on this link from the Japanese Ministry of Foreign Affairs.
India`s exit from RCEP was understandable given trade deficits and domestic resistance, but Japan and other RCEP member states strongly wanted India to return to free trade. .
