China-led mega trade bloc RCEP takes off

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The Regional Comprehensive Economic Partnership (RCEP), a mega trade bloc comprising 15 countries led by China that came into existence on Sunday, said India would have to write expressing “intention” to join the organisation to restart negotiation for membership. In a statement made public after the initialising ceremony among the member-countries on the sidelines of the 37th ASEAN Summit held virtually, the newly formed organisation has laid down the path for restarting discussion that had failed to admit India earlier and said “new” developments would be taken into consideration when India re-applied.

Also read: Asia forms world’s biggest trade bloc, a China-backed group excluding U.S.

“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 depository of the RCEP Agreement, taking into consideration the latest status of India’s participation in the RCEP negotiations and any new development thereafter,” declared the RCEP, which consists of the 10 ASEAN members and Australia, China, Japan, South Korea and New Zealand. The China-backed group is expected to represent at least 30% of the global GDP and will emerge as the largest free trade agreement in the world.

Modi’s silence

The mega trade bloc is a landmark trade initiative which is expected to boost commerce among the member-countries spread across the Asia-Pacific region. Prime Minister Narendra Modi addressed the ASEAN Summit on November 12 and highlighted the necessity for peace and stability in the region but maintained silence regarding RCEP, indicating India’s difficulty in welcoming the China-backed grouping. 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 maritime exercise with Japan, Australia, 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. Experts are interpreting the beginning of RCEP as a major development that will help China and trade in Asia-Pacific region in the post-COVID-19 scenario.

Also read: India and ASEAN to expand trade despite RCEP walkout

‘Leverage for China’

“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,” said Amitendu Palit, Senior Research Fellow and Research Lead (Trade and Economics), at the Institute of South Asian Studies, National University of Singapore. “The fact this happened, despite the pandemic, is certainly leverage for China, and shows the idea of decoupling from China is not a substantive issue in a regional sense.”

India had ended negotiation on RCEP last November over terms that were perceived to be against its interests. In May, The Hindu had reported that according to senior official sources, concerns regarding China in the post-coronavirus world scenario had prevented Delhi from restarting negotiation for membership of RCEP. India did not return to the negotiation despite request from the RCEP members who have discussed the trade pact for nearly eight years.

Also read: India storms out of RCEP, says trade deal hurts Indian farmers

South China Sea

Concerns regarding China were reflected in the statements of External Affairs Minister S. Jaishankar who stuck to India’s well known position about the South China Sea. In his comments at the ministerial-level discussion of the 15th East Asia Summit (EAS), Mr. Jaishankar obliquely referred to China and said “actions and incidents” in the important maritime region eroded trust and suggested the need to adhere to the rules-based international system. He also maintained the need for “respecting territorial integrity and sovereignty” — an obvious reference to the tension at LAC and Chinese activities in Pakistan-occupied Kashmir..

It is understood that staying out of RCEP may interfere with India’s bilateral trading with the RCEP member-countries.

(With inputs from Ananth Krishnan)

Disclaimer: This post has not been edited by our staff and is published from a syndicated feed. The Original Source of this post can be found at Source link

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