India’s Stand To 'Stand Out' Of RCEP
Apart from the RCEP, other most significant Mega-FTAs include the Trans-Atlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP).
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Indian Prime Minister Narendra Modi has announced on November 4 that India is not in a position to conclude the RCEP due to its adverse impact on domestic farmers, dairy sector and MSMEs. The other cause of disagreement remains on issues of market access and base year (2014) for tariff reductions and the non-tariff barriers (NTBs). India has similar concerns for flooding of Chinese goods due to market access to China. India has already huge trade deficit with China. More recently, different organizations and NGOs have warned against the cheap dairy products like milk powder and other dairy items from New Zealand and Australia in Indian markets after the implementation of RCEP.
What is RCEP?
A Free Trade Agreement (FTA) is a form of a binding agreement between two or more countries for elimination/reduction of tariffs and non-tariffs on bilateral exports and imports among members. FTAs have been proliferating in the Asian region since the 1990s. However, the plurilateral and bilateral FTAs have been conveyed by the concurrent negotiations of Mega-FTAs. Mega-FTAs or mega-regionals as these agreements are called include a large number of economies if not all or two or more regions. The Regional Comprehensive Economic Partnership (RCEP) covers 16 countries - 10 ASEAN, 4 other Asian economies (India, Japan, China, South Korea), Australia and New Zealand. Their large membership and shares in world trade and global GDP, as well as their declared intention to promote deep economic integration, characterize these Mega-FTAs. Apart from the RCEP, other most significant Mega-FTAs include the Trans-Atlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP). The Mega-FTAs do not include only tariffs, but also include ‘beyond-the-border’ regulatory and non-tariff measures (NTMs). These agreements cover other complex areas such as agriculture, services, investment, intellectual property, e-commerce, and labour and environmental standards.
History of RCEP
Moreover, the formation of RCEP was announced in November 2011 at the 19th ASEAN Summit; however, formal negotiations were launched only in November 2012 at the 21st ASEAN Summit. The announcement for the creation of one of the world’s largest mega-FTAs can be seen as a response to Comprehensive Economic Partnership for East Asia (CEPEA) and the East Asia Free Trade Area (EAFTA). In November 2012, the ‘Guiding Principles and Objectives for Negotiating the Regional Comprehensive Economic Partnership’ were launched. Since then, a large number of talks have been held for finalizing this trade deal.