The East Asia Summit, and RCEP
The trade is going through a rough period as big trade facilitation institutes like WTO, and agreements like Trans-Pacific Partnership are losing their charm. The trade is important because since the world practised open borders through trade relations- poverty and hunger have reduced remarkably.
This is evident that developed nations are more interested in closing doors and adopting the policy of protectionism which is affecting developing nations.
RCEP is considered as an alternative to the important multilateral treaties, and it is under negotiation between countries.
Second, the Regional Comprehensive Economic Partnership (RCEP) Summit held in November 2018 in Singapore.
Along with, attend the East Asia Summit, ASEAN-India informal meet was also attended.
The East Asia Summit - Importance
The East Asia Summit may be useful for India for exploring wide-ranging issues pertaining to smart cities, IT, communication, maritime cooperation and terrorism with 17 other participating leaders. EAS has now emerged as the most critical multilateral framework in the Indo-Pacific where multiple stakeholders engage each other annually. The East Asia Summit, which includes India, China, Japan, South Korea, Australia, New Zealand, the US and Russia apart from the 10 ASEAN member states, also gives India an opportunity to underline its credentials as an important stakeholder in regional developments.
Would India be able to eradicate TB and Malaria? - Read About
What is RCEP?
Regional Comprehensive Economic Partnership (RCEP) – is a proposed free trade agreement (FTA) or comprehensive regional economic integration agreement between 10-ASEAN countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam) and its six FTA partners (Australia, New Zealand, India, China, Japan and Korea). The negotiations For RCEP was formally launched at the 2012 ASEAN summit in Cambodia.
10+6 RCEP member states accounted for a population of 3.4 billion people with total GDP (in terms of PPP) of 49.5$ trillion, approximately 38% of the world’s GDP and 29% of the world trade.
RCEP is viewed as an alternative to the Trans-Pacific Partnership (TPP), a proposed trade agreement that includes several Asian and America nations but excludes China and India.
The Benefit and Importance
RCEP, when concluded, will provide a framework aimed at lowering trade barriers and securing improved market access for goods and services for business in the region. The grouping will create the largest regional trading bloc in the world.
It is expected that ‘being inclusive’ the RCEP will help in tackling with challenges arising from globalization and trade liberalization. RCEP is more focused on ‘affordability’.
Words of caution
While concluding RCEP, the focus should be on building the economic complementarities and generating interlinks.The inter-linkage should enhance Regional Value Chains.
The skill matching needs to be given attention while signing the Movement of Natural Person Harnessing Regional Skill Complementarities.
India’s Situation and Problems
RCEP and India’s agreement-- India has insisted on concluding a “balanced and collectively satisfactory” RCEP agreement.
-- India wants a services pact to be included in the government.
-- India also is holding comprehensive stakeholder consultations with industries as well as different ministers to solve the trade deficit with China.
Why India wants services pact in RCEP – Services are becoming a dominant driver of growth in both developed and developing countries. It contributes almost two-thirds of India’s GDP. Surplus (more income) in service trade finance is almost equal to the half of India’s trade deficit. India is pushing in services sectors for easier movement of its professionals to RCEP member countries.
ASEAN and India Relationship
ASEAN stands for the Association of South East Asian Nations. This is a regional intergovernmental group where the governments of ten ASEAN countries promote economic, political, social, security and military cooperation since 1967. India is not a member of the ASEAN group yet these countries hold importance for India under her act east policy.On 26th January, Republic Day of India, the heads of 10 ASEAN countries were invited as a chief guest in India to strengthen ties.
The world has to go towards protectionism gradually, which in long run may create turmoil in the world.
Reasons for India and ASEAN Ties-
- Demands in the western region for goods has reduced. - Countries need to find the new market which India can provide due to the large population demands
- The world is multipolar and the tension rises among the great power of the world like U.S, Russia, and U.S and China.
- Non aligned countries need to be together and form alliances.
- China's growing presence in the Indopacific region
- Geographical Proximity (Closeness) of India and ASEAN will serve the interest of both the nations.
AREAS for Growing co-operation
Security, connectivity, commerce and culture will work as pillars for India and ASEAN group. Security - Stronger relation with Myanmar has helped India to curb insurgency in the northeast region. India will further enhance security cooperation with Myanmar. Terrorism is on the rise, so all countries need to further enhance security cooperation with one another.
Connectivity- Between India and ASEAN will serve better interest for these countries. Some of the projects are- a trilateral highway between northeastern state to Thailand (IMT Project- India Myanmar Thailand project. ) Kaladan Multimodal transit and transport project has been under implementation for years. Rih Tedim Project in Myanmar was in progress to enhance connectivity between India and ASEAN Nations. It will provide all weather road. The process of Kalewa Yargi road speeds up. India- Myanmar- Thailand Motor Vehicle act has also come in picture.
Commerce- While the volume of trade and investment flows between ASEAN and India remained low foreign direct investments (FDI) flow from India to ASEAN increased by 9.4 per cent, from $0.96 billion in 2015 to $1.05 billion in 2016.
India’s two-way trade with ASEAN now stands at approximately USD 76 billion. • The India-ASEAN Free Trade pact in services and investments, which was concluded in 2014 and came into effect a year later, has the potential to reduce India’s trade deficit with the region as also impart a strong impulse to bilateral exchange.
Culture- The large Indian diasporas in many Southeast Asian countries help strengthen diplomatic, economic and security relations between India and ASEAN as they contribute to expand and intensify bonds. The Indian diaspora comprises an important instrument of India’s soft power.
