Joining the RCEP could be counter-productive given the existing inefficiencies of Indian producers. These need to be fixed first
To be or not to be, that is the question … This seems to be the best way of describing India’s engagement in the negotiations for adopting the Regional Comprehensive Economic Partnership (RCEP), the mega regional trade agreement of 16 East Asian countries. When the Bangkok round of the RCEP participating countries (RPCs) was held about six weeks ago, there were indications that the government had serious doubts about joining the RCEP. More recently, it has shown signs of a re-think; it appears that the government would continue to engage in the RCEP negotiations. This is a critical phase for the RCEP, as almost all countries are pushing to conclude the negotiations before the end of 2019.
The government’s changed stance on the RCEP comes even as a large segment of India’s manufacturing and diary sectors has consistently spoken against joining this agreement, arguing that import competition would adversely affect them. It is difficult to objectively assess the claims of Indian enterprises, especially because the negotiations are held in complete secrecy and the terms of engagement in the RCEP are not known. This is the most confounding aspect of all FTAs, including the RCEP. Each participating government claims, without exception, that these agreements enhance the economic welfare of its citizens; and yet, the citizens are deprived of an opportunity to independently assess benefits of FTAs.
Please click here to read more.