News:Union Minister of Commerce & Industry and Railways will be attending the 8th Regional Comprehensive Economic Partnership(RCEP) Ministerial Meeting in Bangkok.Thailand.
What is RCEP?
- RCEP is a proposed regional free trade agreement (FTA) comprising of ASEAN countries (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam) and their 6 FTA partners (India, China, Japan, South Korea, Australia and New Zealand).
- The purpose of RCEP is to create an integrated market spanning all 16 countries, making it easier for products and services of each of these countries to be available across this region.
- RCEP also aims to boost goods trade by eliminating most tariff and non-tariff barriers which is expected to provide the region’s consumers greater choice of quality products at affordable rates.
- It also seeks to liberalise investment norms and do away with services trade restrictions.
Importance of RCEP:
- The RCEP member countries represent 49% of the world’s population and accounts for 30% of world GDP. It also makes up 29% of world trade and 26% of world FDI inflows.
- RCEP will reduce the trade barriers in Asia and the new rules will be consistent with WTO agreements.
- It will also promote easier FDI flows and technology transfers by multinational corporations.
India and RCEP:
- The sections of the Indian industry feels that being part of RCEP would allow the country to tap into a huge market and can make the domestic industry competitive.
- The rise in protectionism and non- tariff barriers and regulatory measures and the deadlock in WTO negotiations are also important reasons for India to join the RCEP agreement.
- RCEP also has the potential to influence India’s strategic and economic status in the Asia-Pacific region and help in fulfilment of India’s Act East Policy.
- India is concerned that the trade pact will allow greater access to Chinese goods which may have an impact on the Indian manufacturing sector.
- Experts have said that India would not be able to take advantage of the deal due to its poor track record of extracting benefits from the Free trade agreements(FTAs) with these countries.
- The industries like dairy and steel have demanded protection due to growing competition from neighbouring countries with cheaper and more efficient processes may impact it negatively.
- There are demands by other RCEP countries for lowering customs duties on a number of products and greater access to the market than India has been willing to provide.