The Regional Comprehensive Economic Partnership (RCEP, a mega trade bloc comprising 15 countries signed the world’s biggest free trade deal on Sunday.
The Association of Southeast Asian Nations (ASEAN – Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam – Australia, China, Japan, Korea and New Zealand, met virtually on 15 November 2020 and signed the agreement to help recover from the shocks of Covid-19 pandemic.
“We were pleased to witness the signing of the RCEP Agreement, which comes at a time when the world is confronted with the unprecedented challenge brought about by the Coronavirus Disease 2019 (Covid-19 global pandemic,” said the joint statement.
India, which had been one of the original negotiating participants, walked out of the RCEP talks last year citing “outstanding issues” but according to the document signed on Sunday, has the oon of joining the bloc once New Delhi submits its intention of joining the pact “in writing”.
“Further, we would highly value India’s role in RCEP and reiterate that the RCEP remains open to India. As one of the 16 original participating countries, India’s accession to the RCEP Agreement would be welcome in view of its participation in RCEP negotiations since 2012 and its strategic importance as a regional partner in creating deeper and expanded regional value chains,” the joint leaders’ statement on the RCEP asserted.
In this regard, the bloc put out a separate document “Ministers’ Declaration on India’s participation in the Regional Comprehensive Economic Partnership (RCEP” which recognised the “strategic” importance of India and made provision for it to join in the future and invited it to be an “observer” at the RCEP any time prior to its accession to the trading bloc.
The RCEP Agreement is “open” for accession by India from the date of the Agreement and “The RCEP Signatory States will commence negotiations with India at any time after the signing of the RCEP Agreement once India submits a request in writing of its intention to accede to the RCEP Agreement to the Depositary of the RCEP Agreement, taking into consideration the latest status of India’s participation in the RCEP negotiations and any new development thereafter,” said the Ministers’ Declaration on India’s participation in the Regional Comprehensive Economic Partnership (RCEP.
The document added, “Any time prior to its accession to the Agreement, India may participate in RCEP meetings as an observer and in economic cooperation activities undertaken by the RCEP Signatory States under the RCEP Agreement, on terms and conditions to be jointly decided upon by the RCEP Signatory States.”
On the issue of trade, India and ASEAN countries said they would explore ways to increase trade between them despite India’s exit from the 15-nation Regional Comprehensive Economic Partnership (RCEP agreement.
“As far as India is concerned, we did not join RCEP as it does not address the outstanding issues and concerns of India. However, we remain committed to deepening our trade relations with ASEAN,” said MEA Secretary (East Riva Ganguly Das on Thursday during a briefing held after the ASEAN-India summit.
Singapore prime minister Lee Hsien Loong said he joins fellow countries in “hoping that India too, will be able to come on board at some point so that the participation in the RCEP will fully reflect the emerging patterns of integration and regional cooperation in Asia.”
ASEAN is India’s fourth-largest trading partner with about US $86.9 billion in trade between India and the ten ASEAN nations: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
For China, this comes as a huge achievement. The agreement would lower tariffs and open up the services trade within the bloc. The RCEP is now being looked at as a Beijing-driven bloc and an alternative to the United States in the region.
First proposed in 2012, the deal was finally sealed at the end of a Southeast Asian summit as leaders push to get their pandemic-hit economies back on track.
“Under the current global circumstances, the fact the RCEP has been signed after eight years of negotiations brings a ray of light and hope amid the clouds,” said Chinese Premier Li Keqiang after the virtual signing.
“It clearly shows that multilateralism is the right way, and represents the right direction of the global economy and humanity’s progress.”
“We note that the RCEP Agreement is an unprecedented mega-regional trading arrangement that comprises a diverse mix of developed, developing and least-developed economies of the region. As an agreement that would cover a market of 2.2 billion people, or almost 30 per cent of the world’s population, with a combined GDP of US$ 26.2 trillion or about 30 per cent of global GDP, and accounts for nearly 28 per cent of global trade (based on 2019 figures, we believe that RCEP, being the world’s largest free trade arrangement, represents an important step forward towards an ideal framework of global trade and investment rules,” said the joint statement.