The RCEP is not considered a “high quality” trade agreement as the comprehensive and progressive agreement for the Trans-Pacific Partnership (CPTPP) among 11 Asia-Pacific countries, as it does not cover as much or harmonize as much. Although India withdrew at the last minute, China and 14 other countries agreed this week in Bangkok on what could become the world`s largest trade agreement – the Comprehensive Regional Economic Partnership (RCEP). The agreement also covers services and the protection of intellectual property. Many Member States have already concluded free trade agreements, but there are restrictions. First, India has recently increased its tariffs on a number of items, and if it accepts a suspension of tariffs, the starting point must now be actual tariffs, not what existed before. There was no agreement on that. In drafting the decision, Prime Minister Modi said that the current form of the RCEP (Global Regional Economic Partnership) agreement does not fully reflect the spirit and guiding principles of the RCEP. He added that he was also not responding satisfactorily to India`s outstanding issues and concerns and that, in such a situation, India was not in a position to accede to the RCEP agreement. The real concern is that the world is moving rapidly towards quality free trade agreements. In fact, there are those who see the RCEP as a relatively weak free trade agreement.
And compared to the USMCA (United States-Mexico-Canada Agreement) or CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership), some might argue that rcep is actually less global. Therefore, if India finds it difficult to join the RCEP, it may find the evolving international trading environment unfriendly or even hostile. That is where the government needs to step in and ask the private sector to shape itself. Beyond agriculture, which will always be sensitive and deserve protection, other sectors cannot expect to be trampled on forever. It is essential that the Ministry of Commerce deal with free trade agreements such as the EU-Vietnam, USMCA and CPTPP, particularly in areas such as intellectual property rights (IPR), investment, tariff and non-tariff barriers, the environment and e-commerce. The provisions on these issues, contained in the aforementioned free trade agreements, will become, whether India likes it or not, the norm over time. And if India wants a $5 trillion saving, we must now begin to modernize laws and regulations.