RCEP

Subject : Economy

Context : The Regional Comprehensive Economic Partnership (RCEP), a mega trade bloc comprising 15 countries led by China, that came into existence said India would have to write expressing “intention” to join the organisation to restart negotiations for membership.

Concept :

• Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement (FTA) between –

                The 10 members of ASEAN

                Additional members of ASEAN +3 = China, Japan, South Korea

                Members with which ASEAN countries have FTA = Australia, New Zealand

• The group is expected to represent at least 30% of the global GDP and will emerge as the largest free trade agreement in the world.
• It includes more than 3 billion people, has a combined GDP of about $17 trillion, and accounts for about 40 per cent of world trade.

India’s reluctance

• India’s ties with China in recent months have been disturbed by the military tension in eastern Ladakh along the LAC.
• In the meantime, India has also held a maritime exercise with Japan, Australia, and the United States for the “Quad” that was interpreted as an anti-China move.
• However, these moves did not influence Japanese and Australian plans regarding RCEP.

Leverage for China

• Despite the pandemic, the RCEP is certainly leverage for China and shows the idea of decoupling from China is not a substantive issue in a regional sense.
• The agreement means a lot for China, as it will give it access to Japanese and South Korean markets in a big way, as the three countries have not yet agreed on their FTA.

Source : The Hindu