The RCEP was signed at the end of the association of Southeast Asian Nations (Asean) annual summit, which was held almost this year. The agreement, which covers 15 countries (10 by Asean and Australia, China, Japan, New Zealand and South Korea), covers nearly a third of the world`s population, or nearly 2 billion people. The collective GDP is $26 trillion, one third of the world`s total. 2 www.thehindu.com/opinion/lead/after-rcep-opt-out-the-challenge-of-a-shape-up/article29902806.ece A country`s attitude towards trade agreements is a function of trade policy or distribution costs that certain groups are willing to bear in exchange for market access abroad. In the 1980s, India`s approach to the Uruguay Round was marked by officials aware of the market constraints of Indian companies in industries such as textiles, services and agriculture. The current agreement does not adequately address India`s concerns in this area, although tariff reductions are gradual. In fact, India`s trade deficit with Asean increased from $22 billion to $24 billion between 2018-19 and 2019-20, while it remained more or less stable with the remaining five – China, Japan, South Korea, Australia and New Zealand. Biswajit Dhar writes for The Hindu that after the RCEP opt-out, it`s time to change attitudes. 2 It argues that India must put an end to its defensive logic in trade agreements and should instead work to create globally competitive sectors. In an editorial, The Hindu noted that “India must not take the simplest exit door from the trade agreement and get out of the discussions. 3 The Times of India criticized India`s decision to stay out, a little more critical.
In an editorial on 7 November, it said: “Isolationism is not an option.” With a strong argument, she said: “From a practical point of view, it is not realistic to look inward in the search for efficiency before reopening. Being integrated into the global economy through trade agreements and strengthening domestic competitiveness is linked. That is why the government must pursue internal reforms at the same time as negotiations on the expansion of the Indian commercial market. 4 The RCEP is expected to remove a number of tariffs on imported goods for Member States over the next 20 years. The agreement also includes rules on intellectual property, telecommunications, financial services and free trade services and e-commerce. Two trade agreements have hit the headlines in recent days. One of them, of course, was the trade negotiations between the United States and China. The second, equally important, was the Comprehensive Regional Economic Partnership (RCEP) – a proposed free trade agreement between 16 Asian nations. China responds to India`s concerns.
The day after India`s return from the RCEP, China said it would follow the principle of “mutual understanding and conciliatory attitude” to resolve India`s outstanding issues. 5 China also stated that it would appreciate India`s adherent to the agreement at an early stage. Chinese Foreign Ministry spokesman Geng Shuang said “RCEP is open” and added: “If it is signed and implemented, it is conducive to the entry of Indian goods into China and other participating countries.