After India’s decision to withdraw from the Regional Comprehensive Economic Partnership (RCEP) in 2019, there has been a notable surge in Free Trade Agreement (FTA) initiatives within the region. The move by India, which is home to one of the largest economies in the world, has sparked renewed interest and accelerated efforts among other countries to forge bilateral and multilateral trade agreements.
The withdrawal from RCEP, a comprehensive trade agreement between 15 Asia-Pacific nations, was primarily driven by concerns over its impact on India’s domestic industries, particularly the agricultural sector. By opting out of RCEP, India aimed to safeguard the interests of its farmers and ensure that the influx of cheaper imports would not undermine their livelihoods.
However, this move opened up new opportunities for other countries in the region. Several nations swiftly seized the chance to strengthen their economic ties and explore alternative trade arrangements. Some countries, such as Japan and South Korea, have actively pursued bilateral FTAs with India, aiming to expand their access to the Indian market and diversify their trade portfolios.
Moreover, the withdrawal prompted a reevaluation of regional trade dynamics and strategies. In response, countries across the Asia-Pacific region have intensified efforts to forge stronger economic alliances. For instance, the Association of Southeast Asian Nations (ASEAN) has taken steps to enhance intra-regional trade and deepen integration through initiatives like the ASEAN Free Trade Area (AFTA). This push towards greater economic cooperation aims to compensate for India’s absence in RCEP and maintain the growth momentum in the region.
Furthermore, India’s withdrawal from RCEP also prompted a shift in focus towards other regional trade agreements. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), originally designed as a successor to the Trans-Pacific Partnership (TPP), gained renewed attention. The CPTPP, which includes countries such as Japan, Australia, Canada, and Mexico, presents an opportunity for India to access markets beyond its immediate neighborhood. Negotiations and discussions regarding India’s potential entry into the CPTPP have gained traction, signaling a potential diversification of trade partnerships for the country.
In conclusion, India’s withdrawal from RCEP has set in motion a series of FTA endeavors within the region. While India sought to protect its domestic industries, other countries have capitalized on this opportunity to forge new trade alliances and strengthen existing ones. Efforts to enhance intra-regional trade and explore alternative agreements have gained momentum, showcasing a renewed focus on regional economic integration. As negotiations continue and new agreements are forged, the evolving trade landscape in Asia-Pacific holds both opportunities and challenges for the participating nations.
