On the agenda when Prime Minister Narendra Modi flew to Bangkok on Sunday was a crucial trade deal that could hugely impact the Indian economy: The Regional Comprehensive Economic Partnership or RCEP. Here’s what the deal is and why everyone in India is so wary of it.
What is the RCEP?
The Regional Comprehensive Economic Partnership is a free trade agreement between 16 countries across the Asia-Pacific region that looks to drop tariffs and duties between the members so that goods and services can flow freely between them.
At the RCEP’s administrative core is ASEAN: an intergovernmental grouping of 10 Southeast Asian countries – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. The ASEAN bloc will be joined with six dialogue partners: China, Japan, India, South Korea, Australia and New Zealand.
Free trade agreements aren’t new. But the sheer scale of the RCEP changes the game. If executed, it would be the world’s largest trading bloc with half the world’s population and around a third of global GDP.
While the RCEP is administratively built around ASEAN, the main mover is actually China. It was pushed by Beijing starting 2012 in order to counter another free trade agreement that was in the works at the time: the...
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