RCEP, World’s largest Trade Deal

RCEP , World’s largest Trade Deal

Key points:

• RCEP: Regional Comprehensive Economic Partnership

• RCEP: A free trade agreement of 15 countries.

• The trade agreement is of one third of world’s total GDP

• The negotiation of RCEP has started in 2013

• India declared in November 2019 that it would not participate in RCEP

• Member Countries of RCEP includes Australia, China, Japan, New Zealand South Korea, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

India’s concern

• RCEP may open up Indian market for countries like China that would increase the trade deficit with China.

• Indian goods may not take the markets of other member countries whereas goods from other countries may take up Indian market. As a result Indian brand may incur loss.

• As the negotiation begun in 2013, the base year proposed to be 2013. India wanted 2019 to be the base year.

• India wanted auto trigger mechanism to be in place.

• 13 RCRP nations opposed strict country of origin norms.

• India wanted exemption on “ratchet” obligations.