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RCEP faces hitches, may not be implemented by year end

The Regional Comprehensive Economic Partnership is unlikely to be signed by year end. This is being negotiated by 16 mostly Asian countries. The RCEP negotiating countries are the ten Asean countries — Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam — plus Australia, China, India, Japan, South Korea and New Zealand.

After more than five years and 24 rounds of negotiations since May 2013, RCEP countries are still struggling to try and forge an agreement. Concluding the pact by year-end looks unlikely due to differing levels of development among the countries involved, as well as political factors including general elections next year in India and Australia.

India has issues in goods and services. It is of the view that there are many issues that are yet to be resolved, including the extent of commitments India would take in opening up its goods market and what it would get from other members in terms of increase in mobility of professionals. Giving substantial concessions to members, especially China, could lead to protests from a large section of the Indian industry. Once concluded, the RCEP is likely to result in the largest free trade bloc in the world covering about 3.5 billion people and 30 per cent of the world’s GDP.