WHAT IS RCEP
The Regional Comprehensive Economic Partnership (RCEP) is a proposed agreement between the member states of the Association of Southeast Asian Nations (ASEAN) and its free trade agreement (FTA) partners. The pact aims to cover trade in goods and services, intellectual property, etc. Member states of ASEAN and their FTA partners are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam, China, Japan, India, South Korea, Australia and New Zealand.
Why did India not sign the present form of RCEP agreement?
–India decided on November 4, 2019 against joining the 16-nation Regional Comprehensive Economic Partnership (RCEP) trade deal, saying it was not shying away from opening up to global competition across sectors, but it had made a strong case for an outcome which would be favorable to all countries and all sectors.
–The Indian government has decided not to join the Regional Comprehensive Economic Partnership (RCEP), which would have been the world’s largest trade pact, over concerns that it could lead to a potential flood of Chinese imports in the country.
–Prime Minister Shri Narendra Modi, attending the RCEP summit in Bangkok, stood firm on India’s concerns in the trade deal not being addressed and decided there cannot be any compromise on core interests. “RCEP agreement does not reflect its original intent. The outcome was not fair or balanced,” he said.
–Prime Minister Shri Narendra Modi said, “The present form of the RCEP Agreement does not fully reflect the basic spirit and the agreed guiding principles of RCEP. It does not address satisfactorily India’s outstanding issues and concerns.”
India’s not joining RCEP was summed up by the PM himself: ‘Whenever I try and gauge India’s interest in light of her joining RCEP, I do not get an answer in the affirmative; neither Gandhiji’s policy of self-reliance nor my wisdom allows me to join RCEP.’
–The decision not to join ECEP is taken to safeguard the interests of farmers, small and medium enterprises (SMEs), textile, dairy and manufacturing, medicine, steel and chemical industries.
–India had 105 billion dollar trade deficit with RCEP members in Fiscal Year 2019. Out of which China alone accounted for $52 billion. This 15-member group accounts for 34 per cent of our imports, while our exports to them only amount to 21 per cent of our total exports. This concern was not address adequately by the members countries.
–Apart from the perennial dread of cheap Chinese import flooding Indian markets, this time the anxiety was over the impact of the agreement on India’s poor and marginal farmers and milk producers.
–Farm products from Australia, milk from New Zealand, palm oil from Malaysia, and so on, would affect these vulnerable parts of our population. Hence, Our Prime Minister Shri Modi’s reference to Gandhi’s talisman: “Recall the face of the poorest and the weakest man whom you may have seen, and ask yourself, if the step you contemplate is going to be of any use to him.”
–The pact also undermines our ‘Make in India’ initiatives.
–Under RCEP, India would have been required to eliminate tariffs on 74% of goods from China, Australia and New Zealand, and 90% goods from Japan, South Korea and ASEAN. India was not ready to face the risk of becoming a dumping ground for cheap imports.
–Even, historical data shows that Regional Comprehensive Economic Partnership haven’t proven to be very beneficial for India. In fact, over the span of six years (2014-19), among its trading partners, India has improved its trade balance only with SAFTA countries, as a whole.