RCEP Indonesia Stance

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03 January 2022 Current Affairs:On August 25, 2021, India’s Trade Minister, Muhammad Lutfi, presented his case to Indonesia’s lower house of parliament for ratification of the Regional Comprehensive Economic Partnership (RCEP) trade agreement.

Highlights:

  • Minister argued in his statement to DPR Commission VI that the RCEP will benefit Indonesia. 
  • In the midst of the covid-19 pandemic, it also promises to strengthen its role in regional supply chains and improve the country’s economic performance.
  • The Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement between Australia, Brunei, China, Cambodia, Japan, Indonesia, Laos, South Korea, Malaysia, New Zealand, Myanmar, Singapore, Thailand, the Philippines, and Vietnam, which includes Australia, Brunei, China, Cambodia, Japan, Indonesia, Laos, South Korea, Malaysia, New Zealand, Myanmar, Singapore, Thailand, the Philippines, and Vietnam. 
  • The RCEP does not include India or the United States. The 15-member bloc accounts for 30% of the global population and 30% of the global GDP. 
  • India declined to join the RCEP, citing concerns that it would open it up to Chinese goods, thereby increasing its trade deficit with China.
  • The RCEP agreement has been in the works since 2012. India was also involved in the talks. India, on the other hand, withdrew in 2019 due to concerns about lower tariffs. 
  • Prior to India, RCEP did not include the United States, which had left the Trans-Pacific Partnership (TPP) in 2017.

Aim

  • To help emerging economies catch up with developed economies, lower tariffs, open up trade in services and encourage investment.
  • Companies will save money and time as a result of the agreement, which allows them to export products anywhere within the bloc without having to comply with separate rules for each country.

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