India is not yet ready to join RCEP
Original negotiating member India is still unlikely to return to the world’s largest trade deal Regional Comprehensive Economic Partnership (RCEP) as it fears it still cannot compete with an influx of Chinese imports, according to a former World Bank executive.
The RCEP encompasses the 10 ASEAN member states, Australia, China, Japan, South Korea, and New Zealand. Other countries can join the RCEP 18 months after it becomes effective. Original negotiating member India can join the RCEP at any time. Negotiations for this trade pact began in November 2012, but India decided to drop out of the talks in 2019 before RCEP reached completion in 2020.
“India at the moment is still worried about competing with China,” Mari Elka Pangestu, former managing director of Development Policy and Partnerships in the World Bank, told the Jakarta Globe on the sidelines of the Investor Daily Round Table in Jakarta on Tuesday evening.
“India is currently leaning towards its domestic market. We have to wait for the right time for India to be politically ready to return to the RCEP,” Mari said.
If India wishes to join the RCEP, this could bring up the combined population that the trade deal has to half of the global total. The RCEP today accounts for 30 percent of the global gross domestic product (GDP). India’s RCEP membership can also give a boost to RCEP’s global GDP share, according to Mari.
Despite its current unwillingness, it does not mean that RCEP discussions should leave out India.
“In the meantime, we have to continue to engage India by inviting them to RCEP meetings because they were part of the negotiations until the end,” said Mari, who was the trade minister during the Susilo Bambang Yudhoyono presidency.
The RCEP is set to eliminate up to 90 percent of the tariffs imposed on the traded goods between the signatories over 20 years of coming into force. Indonesia officially implemented the RCEP at the beginning of this year. The Philippines became the last of the 15 countries to implement the RCEP. Hong Kong and Sri Lanka have shown interest to join the RCEP.