China-led mega trade bloc RCEP takes off

Context: The Regional Comprehensive Economic Partnership (RCEP), a mega trade bloc comprising 15 countries led by China that came into existence.

• On the sidelines of the 37th ASEAN Summit held virtually, the newly formed organisation has laid down the path for restarting discussion that had failed to admit India earlier and said “new” developments would be taken into consideration when India re-applied.
• India would have to write expressing “intention” to join the organisation to restart negotiation for membership.
• RCEP, consists of the 10 ASEAN members and Australia, China, Japan, South Korea and New Zealand.
• The China-backed group is expected to represent at least 30% of the global GDP and will emerge as the largest free trade agreement in the world.
• The mega trade bloc is a landmark trade initiative, which is expected to boost commerce among the member-countries spread across the Asia-Pacific region.

India’s reluctance

• RCEP is a China-backed grouping.
• India’s ties with China in recent months have been disturbed by the military tension in eastern Ladakh along the LAC.
• In the meantime, India has also held maritime exercise with Japan, Australia, United States for the “Quad” that was interpreted as an anti-China move.
• However, these moves did not influence Japanese and Australian plans regarding RCEP.

‘Leverage for China’

• The agreement means a lot for China, as it will give it access to Japanese and South Korean markets in a big way, as the three countries have not yet agreed on their FTA
• This happened, despite the pandemic, is certainly leverage for China, and shows the idea of decoupling from China is not a substantive issue in a regional sense.

South China Sea

• India’s concerns regarding China expansionism and the need to adhere to the rules-based international system were reflected.
• Need to maintain “respect for territorial integrity and sovereignty” — an obvious reference to the tension at LAC and Chinese activities in Pakistan-occupied Kashmir..

https://www.thehindu.com/news/national/rcep-signatories-ready-for-negotiations-once-india-gives-written-request-to-join-pact/article33102130.ece?homepage=true