Threat or treat: on RCEP trade deal

The Regional Comprehensive Economic Partnership (RCEP) was signed into existence on Sunday by 15 countries led by China, Japan, South Korea, Australia, New Zealand and the 10-state ASEAN grouping, creating one of the world’s largest trading blocs.
After seven years of protracted negotiations India decided last November to exit the grouping and justified its decision as protecting its economy from burgeoning trade deficits with a majority of the 15 RCEP members and had cited the grouping’s refusal to accede to its requests on safeguards as a deal breaker.

With global trade and the economy sinking because of the COVID-19 pandemic, re-energising economic activity can be achieved with the help of RCEP.
RCEP presents a unique opportunity to support economic recovery, inclusive development and job creation even as it helps strengthen regional supply chains.

RCEP members now account for about 30% of the global GDP and a third of the world’s population hence it is imperative for India to acknowledge its significance.
Vietnam, Philippines and some larger nations in the grouping have chosen to bury their geopolitical differences with China in order to prioritise what they collectively see as a mutually beneficial trading compact that would benefit their economies over the longer term.

The summary of the final agreement shows that the pact does cover and attempt to address issues that India had flagged including rules of origin, trade in services, movement of persons and, crucially, remedies and safeguards.

Acknowledging India’s economic heft and value as a market, the RCEP members have not only left the door open should New Delhi reconsider its stance but have also waived a key 18-month cooling period for interested applicants.
It would be in India’s interest to dispassionately review its position and embrace openness rather than protectionism.

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