RCEP and India's Act East Policy. - Seeker's Thoughts

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RCEP and India's Act East Policy.

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Regional Comprehensive Economic Partnership (RCEP) – is a proposed free trade agreement (FTA) or comprehensive regional economic integration agreement between the 10-ASEAN countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam) and its six FTA partners (Australia, New Zealand, India, China, Japan and Korea). The negotiations For RCEP was formally launched at 2012 ASEAN summit in Cambodia.

10+6 RCEP member states accounted for population of 3.4 billion people with total GDP (in terms of PPP) of 49.5$ trillion, approximately 38% of the world’s GDP and 29% of the world trade.

 RCEP is viewed as an alternative to the trans-pacific partnership (TPP), a proposed trade agreement that includes several Asian and America nations but excludes china and India.

RCEP and India agreement
-- India has insisted on concluding a “balanced and collectively satisfactory” RCEP agreement.
-- India wants a services pact to be included in the government.

India’s Act east policy – india  invited all ASEAN countries to new Delhi for a commemorative summit in beginning of year 2018 to mark 25 years of dialogue partnership.

Why India wants services pact in RCEP – Services are becoming a dominant driver of growth in both developed and developing countries. It contribute almost two-thirds of India’s GDP. Surplus (more income) in service trade finance is almost equal to the half of India’s trade deficit. India is pushing in services sectors for easier movement of its professionals to RCEP member countries.

Why India is not happy with the pacts?
RCEP pact india has negotiated with 15 other nation including china, the rising pressure for opening up markets in goods is making negotiations unsustainable. India is not able to justify its continued efforts to reach a compromise. India’s inability to negotiate a good and services deal in the past, RCEP negotiations, especially with china, need a second thought. Indian industry will have more to lose than gain if it agrees to a liberal tariff elimination schedule specially with respect to china at a  time of growing protectionism in the world.

Most recent activity of RCEP
The 5th regional RCEP Ministerial meeting, was held in Tokyo Japan. During the meeting, ministers from member countries had in- depth discussion on issues such as trade, service, investment and rules at the meeting. They recognized importance of early conclusion of RCEP negotiations. They also reaffirmed to work together and achieve agreements that will allow economies at different levels of development to actively participate and benefit from an open and inclusive regional economic integration.

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