20 October, 2019
RCEP countries are expected to finalize the free trade agreement among its member countries by November 2019.
The Leaders Summit will be held on November 4th in Bangkok ,Thailand.
What is RCEP ?
Members : It includes 10 ASEAN members as well as India, China, Australia, New Zealand ,Japan and South Korea.
RCEP consists of 47 % of World Population, one third of global GDP and 27% of global trade.
Advantages of RCEP :
1. It will bring stability to trade relations in an area where such ties have historically been unpredictable.
2. The free trade agreement between the signatories would open up markets of each of the partner countries to the others.
3. This free trade agreement can act as a counterbalance to the APEC and other regional trading blocs like NAFTA, MERCOSUR ,etc.
4. This agreement can promote the rise of Asian century.
5. It will also decrease the dependence on multilateral trade Institutions like WTO, by developing countries, which are dominated by the developed countries.
1. Domination of China in this trade bloc can make the members to side against the US.
2. It can impact India's trade relationship with USA.
India's issues with RCEP:
1. China can get greater access to Indian markets.
2. Cheap imports from China will increase and it will impact India's domestic industry adversely.
3. Presently India imposes safeguard duty on solar panel and anti dumping duties on steel, but from the various RCEP negotiations that have taken place, India has to reduce duties on 80 % of items imported from China.
4. RCEP agreement can impact India's industry ,agriculture and Dairy Sector.
( India would have to cut duties on 86% of imports from Australia and New Zealand and 90% of products from Asian, Japan and South Korea)
5. The Indian government cannot mandate the investing company to Transfer Technology and know-how to its Indian partners.
6. The Indian government cannot set cap on royalties an Indian Company can pay to its foreign partner.
( it can lead to force the transfer of Huge royalty sums to foreign partners instead of paying dividends to Indian shareholders)
7. The E-Commerce chapter would be against India's data localisation plans.
Source: THE HINDU
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