COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT (CEPA)

Description

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Context:

Commerce and Industry Minister Piyush Goyal said the government wants to move forward with a Comprehensive Economic Partnership Agreement (CEPA) with Bangladesh.
It called for greater cooperation between the countries in areas such as defence and pharmaceuticals production.

Understanding CECA and CEPA:

CECA stand for Comprehensive Economic Cooperation Agreement while CEPA is an acronym for Comprehensive Economic Partnership Agreement.
Both CECA and CEPA are forms of economic agreements between India and other countries such as Malaysia, Singapore, and Thailand (for CECA) and Japan, Sri Lanka, and South Korea (for CEPA).
Since both are economic agreements, the two agreements are subject to the benefit of both countries, especially on the economic and trading side.
CECA and CEPA are usually conducted by economic negotiations between two countries.
Once the negotiators reach an amiable agreement over terms and conditions, the agreement is signed by each country’s representative (in this case, the Minister of Commerce) and passed to each country’s parliament or government for approval.
After the approval, the agreement becomes effective by the enforcement of both parties and governments in their own territories.

Terms and conditions:

Terms and conditions vary from country to country in every agreement.
The agreement can cover tariffs of exported goods, protection for overseas workers that are part of a country’s service industry, or foreign direct investments between two countries.
CECA is mainly concerned with tariff reductions and the elimination of all items that are considered to be listed tariff rate quota items.
On the other hand, CEPA has the same components of CECA with an additional focus and options in the terms of trade investments and services. CEPA is much broader and more complicated compared to CECA.
In a comparable economic standing, CECA is considered as the first step or a stepping stone to accomplish CEPA.
If negotiations can still be conducted between countries, and both parties are open to discussion and have a good economic relationship with each other, CECA can evolve into CEPA.
This makes CEPA a result of on-going efforts and negotiations of two countries that started from CECA.

Significance:

These two pacts also help in paving the way for more economic solutions and improvements in terms of export items, investments, and service quality.
Joint expansion of economic interests and opportunities for both countries can also be feasible if it is a part of the terms and conditions with any of the two agreements.
Overall, it improves economic relationships between the two governments and their people.

Read: https://askanydifference.com/difference-between-ceca-and-cepa/