The free trade pact, which is expected to be finalised in 12 months, is seen as a move to protect the countries in East Asia from slowing global trade and to help China which has been hit by rising tariffs and trade wars with the US.
India has refused to be part of what is now a 15-member Regional Comprehensive Economic Partnership (RCEP), an East Asian economic community.
The free trade pact, which is expected to be finalised in 12 months, is seen as a move to protect the countries from slowing global trade and to help China which has been hit by rising tariffs and trade bans with the US.
— Prasar Bharati News Services (@PBNS_India) November 4, 2019
RCEP will include China, Indonesia, Japan, Australia, New Zealand and the 10 ASEAN countries Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.
“This will significantly contribute to an open, inclusive and rules-based international trading system and expansion of value chains,” said ASEAN chairman, Thailand’s Prime Minister Prayuth Chan-ocha.
The countries involved produce about 29% of global gross domestic product (of US$28 trillion) and account for a third of the world’s population.
Exact details of RCEP have not been released, but RCEP will progressively lower tariffs across many areas between the countries in the agreement.
Perhaps equally important is that RCEP will let companies export the same product anywhere within the bloc without having to meet separate requirements and fill out separate paperwork for each country.
“For a goods producer it’s huge,” Deborah Elms of the Asian Trade Centre told Reuters. “What we don’t have now is a lot of Asian trade for final markets in Asia. This sets that up.”
Nine of Australia’s top trading partners — representing 58% of Australia’s trade and 66% of its exports — are part of the deal.
— PM's Office of Japan (@JPN_PMO) November 4, 2019
India, which is widely regarded as a protectionist nation, said it would not be part of RCAP.
“Today, when we look around we see during seven years of RCEP negotiations, many things, including the global economic and trade scenarios, have changed. We cannot overlook these changes. The present form of the RCEP Agreement does not fully reflect the basic spirt and the agreed guiding principles of RCEP. It also does not address satisfactorily India’s outstanding issues and concerns. In such a situation, it is not possible for India to join RCEP Agreement,” said India’s Prime Minister Narendra Modi, India Today reported.
“We have conveyed to the participating countries that we will not be joining the RCEP,” Vijay Thakur Singh, a senior diplomat in charge of East Asia for India’s foreign ministry, told reporters.
“Our decision was guided by the impact this agreement will have on the ordinary human beings of India and livelihood of people, including the poorest of the poor,” said Vijay Thakur Singh, a senior diplomat in charge of East Asia for India’s foreign ministry.
The free trade bloc was first announced in November 2011 at the annual ASEAN summit and close to 30 rounds of negotiations have been held since then.