16-Nov-2020: Asia-Pacific countries form world's largest trading bloc

The Regional Comprehensive Economic Partnership (RCEP) is made up of 10 Southeast Asian countries, as well as South Korea, China, Japan, Australia and New Zealand. The pact is seen as an extension of China's influence in the region.

Negotiations over the new RCEP deal began in 2012 and it was finally signed on the sidelines of a meeting of the Association of Southeast Asian Nations (ASEAN).

The RCEP isn't as comprehensive and doesn't cut tariffs as deeply as the TPP's successor. But many analysts think RCEP's sheer size makes it more significant. Its membership includes a larger group of nations, notably reflecting the membership of China, which considerably boosts the total Gross Domestic Product (GDP) of RCEP members.

While China already has a number of bilateral trade agreements, this is the first time it has signed up to a regional multilateral trade pact.

India was also part of the negotiations, but it pulled out last year over concerns that lower tariffs could hurt local producers. Signatories of the deal said the door remains open for India to join in the future.

Members of the RCEP make up nearly a third of the world's population and account for 29% of global gross domestic product. The new free trade bloc will be bigger than both the US-Mexico-Canada Agreement and the European Union.

The RCEP is expected to eliminate a range of tariffs on imports within 20 years. It also includes provisions on intellectual property, telecommunications, financial services, e-commerce and professional services.

Under RCEP, parts from any member nation would be treated equally, which might give companies in RCEP countries an incentive to look within the trade region for suppliers.

However, some analysts think the deal is likely to benefit China, Japan and South Korea more than other member states.

Six ASEAN nations and three other nations have to ratify it before it takes effect. Ratification will likely be tricky in national parliaments, owing to both anti-trade and anti-China sentiment.

8-Sep-2019:  7th RCEP Ministerial Meeting

The Ministers from the 16 RCEP Participating Countries (RPCs) gathered in Bangkok on 8 September 2019 for the 7th RCEP Ministerial Meeting to review developments in the RCEP negotiations since the Ministers last met in Beijing on 2-3 August 2019. The Meeting was chaired by H.E. Jurin Laksanawisit, Deputy Prime Minister and Minister of Commerce of Thailand. 

The Ministers recognised that negotiations have reached a critical milestone as the deadline for the conclusion of negotiations draws near. Notwithstanding the remaining challenges in the negotiations, RPCs are working on addressing outstanding issues that are fundamental to conclude the agreement this year as mandated by the Leaders. 

Continuing uncertainties in trade and investment environment have dampened growth outlook across the world, with likely impact on businesses and jobs, adding to the urgency and imperative of concluding the RCEP. While noting that certain developments in the global trade environment may affect RPC’s individual positions in the course of the negotiations, Ministers agreed that RPCs should not lose the long-term vision of deepening and expanding the values chains in the RCEP. The Ministers underscored that, successfully concluded, the RCEP will provide the much-needed stability and certainty to the market, which will in turn boost trade and investment in the region. To this end, Ministers reaffirmed their collective resolve to bring negotiations to a conclusion.

The Ministers committed to avail negotiators with the necessary resources and mandate to bring negotiations to a close. The Ministers made the collective call to negotiators at all levels to translate this commitment into constructive actions and positive outcomes.

24-Aug-2019: Stakeholders Consultations by Department of Commerce on RCEP

In the last 6 years of the Regional Comprehensive Economic Partnership (RCEP) negotiations, more than 100 stakeholders’ consultations have been held by the Department of Commerce and other lead Ministries and Departments of the Government of India seeking industry inputs for formulating India’s interests, covering a wide spectrum of the economy including agriculture, chemicals, petrochemicals, pharmaceuticals, plastics, textiles, ferrous and nonferrous metals, automobiles and machinery.

The Department of Commerce also got industry feedback in the area of rules of origin, Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT), antidumping, countervailing duties, safeguards measures and Intellectual Property Rights as well. The consultations also included, in recent times, comprehensive interactions with stakeholders under the guidance of the Minister for Commerce and Industry and Railways, Piyush Goyal. Several industry consultations were also organised by FICCI, PHD Chamber of Commerce and Industry, CII, ASSOCHAM and DGTR.

State Governments are one of the important stake holders in these negotiations. Recognising this Commerce Secretaries have led delegations to various states and regular engagements have been held with Chief Secretaries and their teams of officials on the various aspects of RCEP so that they may be made aware of the developments and encouraged to further interact with industry and other stakeholders. Delegations have been led to the States of Punjab, Haryana, Andhra Pradesh, Telangana, Assam, Kerala, Karnataka, Tamil Nadu, Gujarat and Rajasthan.

At the Ministerial level, RCEP has been represented and guided by Commerce Ministers Nirmala Sitharaman, Suresh Prabhu, CR Chaudhary and Piyush Goyal over the past five years. Besides, in the various Working Groups/ Sub-Working Groups senior representatives of other Government Ministries/Departments have been leading the negotiations such as Department of Revenue, Central Board for Indirect Taxes and Customs, Department of Economic Affairs, Department for Promotion of Industry and Internal Trade, Ministry of Electronics and Information Technology, Department of Commerce, Directorate General of Trade Remedies, Department of Financial Services, Department of Telecommunication, Competition Commission of India, Reserve Bank of India. On other specific issues pertaining to other line Ministries/Departments, the Department of Commerce has been obtaining their inputs for framing India’s negotiating strategy in RCEP.

RCEP negotiations began in November 2012, in Cambodia. RCEP negotiations are held at various levels – Prime Minster of India participates in the RCEP Summits while Commerce and Industry Minister leads the Indian delegation at the RCEP Ministerial Meetings and at the expert level senior officials of Department of Commerce take the lead in the Trade Negotiating Committee (TNC).

Department of Commerce also entrusted three autonomous think tanks viz. Indian Council for Research on International Economic Relations (ICRIER), IIM Bangalore and Centre for Regional Trade (CRT), New Delhi for making independent studies on RCEP with exhaustive consultations with stakeholders across the country.

The RCEP is a proposed free trade agreement (FTA) between the ten member states of the Association of Southeast Asian Nations (ASEAN) ( Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam) and its six FTA partners ( China, Japan, India, South Korea, Australia and New Zealand).

In 2017, prospective RCEP member states accounted for a population of 3.4 billion people with a Gross Domestic Product (GDP, PPP) of 49.5 trillion USD, approximately 39 percent of the world’s GDP, with the combined GDPs of India and China making up more than half that amount.

RCEP is the world’s largest economic bloc, covering nearly half of the global economy and is estimated that by 2050 the GDP of RCEP member states is likely to amount to nearly 250 trillion USD with the combined GDPs of India and China making up more than 75 percent of the amount.

1-Mar-2019: Suresh Prabhu reaches Cambodia to attend 7th RCEP Inter-Sessional Ministerial Meeting

Union Minister of Commerce & Industry and Civil Aviation, Suresh Prabhu, has reached Siem Reap in Cambodia for the Seventh Regional Comprehensive Economic Partnership Intersessional Ministerial Meeting (7th RCEP ISSL MM) to be held on 2nd March 2019.

The 7th RCEP ISSL MM will see bilateral sessions and opening ceremony attended by Prime Minister of the Kingdom of Cambodia, Mr. Hun Sen. Ministers from 16 RCEP Participating Countries (RPCs) will be attending the 7th RCEP ISSL MM. The meeting will be chaired by Chutima Bunyapraphasara, Acting Minister of Commerce of Thailand. In this meeting, developments since the second RCEP summit held on 14th November 2018 in Singapore will be reviewed, particularly the outcomes of the 2nd Special Trade Negotiating Committee (TNC) meeting held on 25-26 January 2019 in Jakarta, Indonesia and the 25th RCEP TNC meeting and Related Meetings held on 19-28 February 2019 in Bali, Indonesia.

Union Commerce Minister said that after 5 years of hard and intense negotiations India, at the end of the second RCEP Summit, is now perceived as the constructive player of RCEP, providing guidance and building consensus on critical areas by taking into consideration the concerns and aspirations of all member countries. This will ensure that there is no marginalization of request of smaller countries and there is room for ‘policy space’ for developing countries in transition as it will help to moderate ambitions particularly in the goods negotiations and lead to balanced and mutually beneficial outcomes.

Suresh Prabhu also lauded the role played by Singapore as chair. During the term of the Singapore chair, several ministerial and experts’ meetings resulted in successful conclusion of five chapters taking total number of chapters concluded so far to 7 out of 16. At the RCEP Trade Ministers’ Meeting on 12-13 November 2018 Singapore deftly steered the consensus on ‘substantial progress’ instead of ‘substantial conclusion’.

At the Ministerial, India’s flexibility helped in facilitating successful conclusion of three chapters, namely (i) institutional provisions; (ii) Sanitary and Phyto-Sanitary (SPS) measures and (iii) Standards, Technical Regulations and Conformity Assessment Procedure (STRACAP). In the chapter on Institutional Provisions, India agreed to the proposed ‘consensus principle’ on the understanding that the RCEP Secretariat to be set up subsequently will ensure participation of all member countries in the decision making process.

The Regional Comprehensive Partnership (RCEP) is a proposed Free Trade Agreement (FTA) between sixteen countries namely 10 countries of ASEAN (Brunei, Cambodia, Indonesia, Lao, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam) and their six FTA partners (also known as AFP’s or ASEAN FTA Partners) namely Australia, China, India, Japan, Korea and New Zealand.

The RCEP has entered the sixth year of negotiations. During the last five years 24 Rounds of negotiations at the expert level were held – the last Round was held from 18-27 October, 2018 in Auckland; six Ministerial meetings and seven inter-sessional Ministerial meetings were held so far - the 6th Ministerial meeting held on 30-31 August, 2018 in Singapore and the 7th inter-sessional Ministerial meeting held on 12-13 November, 2018 in Singapore; and two RCEP Leaders’ Summits were held. During the 2nd RCEP Summit on 14 November 2018 in Singapore, Leaders acknowledged the ‘substantial progress’ in the negotiations and reiterated their determination to conclude a modern, comprehensive, high quality, and mutually beneficial RCEP in 2019.

13-Nov-2018: 7th RCEP Inter-Sessional Ministerial Meeting concludes in Singapore

The Union Minister for Commerce & Industry and Civil Aviation, Suresh Prabhu, led the Indian delegation to the 7th RCEP Inter-Sessional Ministerial Meeting in Singapore on 12-13 November, 2018. The Minister for Trade and Industry of Singapore Mr. Chan Chun Sing was the Chair of the meeting as Singapore is currently the Chair of ASEAN this year. The Ministerial Meeting was held in preparation for the 2nd RCEP Leaders' Summit to be held on 14th November 2018 in Singapore in which Prime Minister of India will be participating.

The Regional Comprehensive Economic Partnership (RCEP) is a mega regional free trade agreement being negotiated amongst 16 countries, comprising 10 ASEAN countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam) plus six ASEAN FTA partners, namely Australia, China, India, Japan, Korea and New Zealand. So far 6 Ministerial Meetings, 7 Inter-Sessional Ministerial Meetings and 24 rounds of the Trade Negotiating Committee at the technical level have been held.

The Ministers took stock of the state of negotiations across the various chapters. The Chair of the Trade Negotiating Committee, Mr. Pak Iman Pambagyo, made a detailed presentation on the state of play of RCEP negotiations and sought ministerial guidance and direction on pending issues. The Ministers acknowledged the good progress made in the negotiations so far with successful conclusion of 5 chapters this year alone, taking the total to 7 chapters, namely (i) Economic and Technical Cooperation (ii) Small and Medium Enterprises (iii) Customs Procedures and Trade Facilitation (iv) Government Procurement (v) Institutional Provisions (vi) Standards, Technical Regulations and Conformity Assessment Procedures (STRACAP); and (vii) Sanitary and Phytosanitary (SPS). 

The Ministers made an assessment of the progress on ‘The Package of Year End Deliverables’. Suresh Prabhu underlined that ‘substantial progress’ has been achieved in the negotiations which should be reported to the Leaders. He impressed upon all the trade ministers to lend political support to fast track the negotiations.

Commerce Minister defended India’s interests effectively and secured maximum flexibilities. Both in STRACAP and SPS negotiations, India managed to obtain balanced outcomes in the application of the Dispute Settlement Mechanism. India showed flexibility on the principle of ‘consensus’ in the Institutional Provisions Chapter which helped in its successful conclusion during the meeting.

Ministers guided the negotiators to deliberate further on E-Commerce, Competition and Investment chapters where consensus could not be reached during this meeting. Ministers urged the negotiators to intensify their work with a view of narrowing gaps and finding balanced outcomes in the negotiations with the aim of concluding negotiations by 2019.

On the side lines of the RCEP, Commerce Minister held bilateral meetings with his counterparts from Singapore, China, Japan and New Zealand. He discussed bilateral issues and progress in RCEP negotiations. He also had pull-aside meetings with Trade Ministers of South Korea, Indonesia, Cambodia, Malaysia, Australia and Philippines to discuss matters of mutual interest.

13-Oct-2018: 6th Regional Comprehensive Economic Partnership (RCEP) Intersessional Ministerial Meeting

The Ministers from the 16 RCEP Participating Countries (RPCs) attended the 6th RCEP Intersessional Ministerial Meeting held on 13 October 2018 in Singapore. The Ministers reviewed the developments since the 6th RCEP Ministerial Meeting on 30-31 August 2018 in Singapore, particularly the outcomes of intersessional meetings held by various Working Groups and Sub-Working Groups in September 2018 as well as the Special RCEP TNC Meeting on Market Access held on 6-9 October 2018 in Jakarta.

The Ministers welcomed the intensification of market access negotiations. While appreciating some narrowing of gaps, the Ministers emphasised the need for further improvements. The Ministers noted the progress in the negotiations of other chapters on rules, and urged all RCEP Participating Countries to continue to exert all efforts toward meeting the targets set out in the Package of Year-End Deliverables. The Ministers provided guidance on specific issues elevated by the Trade Negotiating Committee.

The Ministers reaffirmed their resolve to bring negotiations to a substantial conclusion and reiterated that the completion of the Package by the year-end is an important milestone, particularly at the time of uncertainties in global trade. The Ministers agreed to work together to overcome any difficulty or challenge as the RCEP negotiations enter into the last mile.

The Ministers agreed to meet next at the Preparatory RCEP Ministerial Meeting prior to the 2nd RCEP Summit in November 2018.

30-Aug-2018: 6TH RCEP Ministerial Meeting begins in Singapore

Union Minister of Commerce& Industry and Civil Aviation, Suresh Prabhu, is leading the Indian delegation for the 6th RCEP Trade Ministers’ Meeting which begins in Singapore.

The Minister will participate in the meeting consisting of 10 ASEAN countries and six ASEAN FTA partners namely, India, China, Japan, Korea, Australia and New Zealand. The meeting is being held on 30th-31st August 2018. India has been constructively engaged in the RCEP negotiations with an aim to work towards a high quality, balanced and inclusive outcomes that take into consideration sensitivities and interests of member countries. The Ministers will give guidance to the Trade Negotiating Committee of RCEP to enable negotiations move forward.

On 1st September 2018, Suresh Prabhu will take part in the 6th East-Asia Economic Ministers’ Meeting(EAS-EMM), attended by Trade and Economic Ministers of 10 ASEAN countries and 8 Dialogue Partners of ASEAN including India, China, US, Russia, Japan, South Korea, Australia and New Zealand. The Ministers will deliberate on the current global economic situation and exchange views on promotion of rule-based multilateral trading system and its importance to the stability and effective functioning of the global economic order.

This will be followed by the 15thIndia-ASEAN Economic Ministers’ Meeting (AEM) which will take stock of the current level of trade and economic engagement between India and ASEAN. During the meeting the Indian Commerce Minister will take up the issue of initiating the review meeting of the India-ASEAN Free Trade Agreement with a view to enhancing utilization of the bilateral FTA for mutual benefit.

ASEAN is amongst the fastest growing markets in the world and presents substantial trade and investments opportunities for India. ASEAN has emerged as the second largest trade partner of India in 2017-18 with bilateral trade valued at US$ 81.33 billion, comprising 10.58% of India’s total trade with the world.

6-Aug-2018: Centre sets up 4 member committee to decide on RCEP

Government has set up a four-member group of ministers (GoM) headed by trade minister Suresh Prabhu to advise prime minister Narendra Modi on whether to continue with or withdraw from the 16-member Regional Comprehensive Economic Partnership (RCEP) negotiations.

Pressure on India has been rising to concede more market access to member countries, including China, and conclude the negotiations by end-December. The RCEP summit is in November, by the time which we have to tell other countries whether we want to be in or out.

The GoM also includes finance and power minister Piyush Goyal, defence minister Nirmala Sitharaman and housing and urban affairs minister Hardeep Puri. The first meeting will be attended by the cabinet secretary, besides secretaries of all other concerned departments. The GoM will also help India fine tune its strategy for the upcoming RCEP ministerial meet on 30 and 31 August in Singapore.

Several countries in the grouping want India to open up its market for 92% of traded goods, while they remained reluctant to allow Indian skilled professionals greater access to their markets. India is ready to offer access for up to 85% of items, with deviations for countries such as China, Australia and New Zealand, with whom it does not have a free-trade agreements.

In recent times, there has been a growing clamour from the industry, as well as from within the government, to exit the RCEP.

V.K. Saraswat, member of the government’s think tank NITI Aayog, argued that India needs to rethink joining the RCEP as it will be “disastrous" to provide more market access to China, which is a key player in the grouping.

India needs to be extra cautious and take into account geostrategic issues while moving ahead with the RCEP deal, as it would mean opening up the market to its adversary China.

Former foreign secretary S. Jaishankar, at a presentation before the parliamentary standing committee on commerce, had called for “observance of due restraint" and warned against concluding trade arrangements that are not in India’s medium-term interest.

22-Jan-2018: ASEAN pushes India to conclude RCEP this year

Mounting pressure on India to give an early consent to the Regional Comprehensive Economic Partnership — a mega regional trade pact being negotiated by sixteen nations. The 10-member ASEAN expressed hope that India would not let the bloc down in its efforts to conclude the agreement this year.

Indonesia played a key role in pushing for negotiations on RCEP in 2011 and is keen, like most other ASEAN members, for its early conclusion. Other members of RCEP include China, South Korea, Japan, Australia and New Zealand.

India, however, refused to take responsibility for the long-winding negotiations as it is important to address the sensitivities and aspirations of all participants. India is not comfortable with the ambitious dismantling of import tariffs being pushed for by the ASEAN, especially as it would also mean allowing duty-free access to Chinese goods. The Indian industry does not want the country to commit to high levels of liberalisation as it fears that it could get out-priced in the domestic market.

So far proposals in the area of services, including on work-visas for movement of professionals, have been disappointing with no member ready to make meaningful contributions.

The RCEP aims to be the largest free-trade bloc in the world, covering about 3.5 billion people and 30 per cent of the world’s gross domestic product.