The world’s biggest free trade deal is finally here. Fifteen countries on Sunday signed the Regional Comprehensive Economic Partnership (RCEP), with China expected to be the Big Daddy. A look
COMMON RULES, LOWER TARIFFS
The RCEP is a trade pact first proposed in 2012 and includes China, Japan, South Korea, New Zealand, Australia, and 10 ASEAN economies—Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar and Cambodia
The agreement is expected to lower or eliminate a range of tariffs within 20 years of it taking effect
It will also lead to the creation of common rules of origin. This will help companies save cost and time
by allowing them to export a product anywhere within the bloc without meeting separate requirements for
each country
INDIAN PULL OUT
India pulled out of the RCEP talks last year over concerns that tariffs reductions will lead to dumping of
Chinese goods in the domestic market. It would also worsen India’s trade deficit
According to the Centre for Strategic and International Studies, India has trade deficits with 11 of the 15 RCEP signatories
While RCEP would open up India’s market to Chinese goods, India got no assurances that its companies would get meaningful access to Chinese markets