900 319 0030

RCEP ministerial meeting

iasparliament Logo
October 12, 2019

Why in News?

Commerce Minister Piyush Goyal is in Bangkok for the 8th Regional Comprehensive Economic Partnership (RCEP) ministerial meeting.

What is the RCEP?

  • The Regional Comprehensive Economic Partnership (RCEP) is a trade deal that is currently under negotiation among 16 countries.
  • These countries are 10 member countries of the Association of Southeast Asian Nations (ASEAN) and 6 countries with which the ASEAN bloc has free trade agreements (FTA).
  • [ASEAN members - Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.]
  • The ASEAN countries have FTAs with India, Australia, China, South Korea, Japan and New Zealand.
  • Negotiations on the details of the RCEP have been on since 2013.
  • All participating countries aim to finalise and sign the deal by November 2019.

What does the RCEP propose?

  • Purpose of RCEP - To create an integrated market spanning all 16 countries, making it easier for products and services of each of these countries to be available across this region.
  • The ASEAN says that deal will provide a framework aimed at lowering trade barriers.
  • The deal will also secure improved market access for goods and services for businesses in the region.
  • Areas of focus for negotiations - Trade in goods and services, investment, economic and technical cooperation, intellectual property, competition, dispute settlement, e-commerce, and small and medium enterprises.
  • RCEP’s importance - It is billed as the “largest” regional trading agreement ever.
  • These countries account for almost half of the world’s population.
  • They contribute over a quarter of world exports, and make up around 30% of global Gross Domestic Product.

How have the talks progressed?

  • The meeting is expected to work out the unresolved issues in the negotiations on the mega trade deal.
  • Of the 25 chapters in the deal, 21 have been finalised.
  • Chapters on investment, e-commerce, rules of origin, and trade remedies are yet to be settled.
  • So that ministerial guidance is being sought at the ongoing meeting in Bangkok.

How does India stand to gain?

  • Sections of Indian industry feel that being part of RCEP would allow the country to tap into a huge market.
  • This will happen if the domestic industry becomes competitive.
  • Pharmaceuticals and cotton yarn are confident of gains.
  • The services industry may have new opportunities.

What are the concerns?

  • Several industries feel India needs to be mindful of the amount of access it gives to its market.
  • There is fear that some domestic sectors may be hit by cheaper alternatives from other RCEP countries.
  • Critics are not confident that India would be able to take advantage of the deal, given its poor track record of extracting benefits from the FTAs with these countries.
  • Industries like dairy and steel have demanded protection.
  • The textile industry has already raised concerns about growing competition from neighbouring countries with cheaper and more efficient processes
  • It now fears the deal would impact it negatively.
  • There are some differences within industries.
  • For example, the bigger players in steel are apprehensive of the potential impact on their businesses.
  • However, makers of finished goods have argued that limiting steel supply to domestic producers through higher import duties will put them at a disadvantage.


Source: The Indian Express

Login or Register to Post Comments
There are no reviews yet. Be the first one to review.



Free UPSC Interview Guidance Programme