Leaders of the Regional Comprehensive Economic Partnership (RCEP) meet today in Bangkok, Thailand. The RCEP is a proposed free trade
Leaders of the Regional Comprehensive Economic Partnership (RCEP) meet today in Bangkok, Thailand.
The RCEP is a proposed free trade agreement (FTA) among the member states of ASEAN and the six countries with which it has FTAs – China, Japan, India, South Korea, Australia and New Zealand. Leaders are expected to commit to sign the RCEP, which would account for a third of global GDP, by 2020.
The biggest sticking point to progress has been India. Amid slowing growth and job creation, New Delhi is wary of the short-term impacts on certain sectors, particularly auto manufacturing, of opening its markets to cheaper, tariff-free imports. Though there are talks of moving forward on the deal without New Delhi, Southeast Asian countries strongly prefer India’s presence as a major counterweight to China amid a reduced US interest in ASEAN.
Regardless, major concessions, such as the exclusion of certain agricultural products and a significant delay time to reducing tariffs on other key products, means PM Narendra Modi will likely green light the deal. Doing so will serve to insulate India, as well as other signatories, in the medium to long term from the ongoing trade slump stemming from the US-China trade war.