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Singapore ratified mega free trade agreement RCEP

Singapore ratified mega free trade agreement RCEP

Recently, Singapore has joined it by signing the Regional Comprehensive Economic Partnership (RCEP) agreement. RCEP is the world’s largest free trade agreement led by China.

It should be noted that the agreement includes ten countries of the ASEAN region as well as Australia, China, Japan, New Zealand and South Korea. But India has not yet accepted this agreement.

Experts said that it would be an important market with a large consumer base and would also have good export prospects.

Singapore Trade and Industry Minister Chan Chun Sing said that the agreement indicates a solid commitment to strengthening trade and economic contacts with our partners for the benefit of Singapore’s businessmen and people.

Regional Comprehensive Economic Partnership (RCEP)

  • It is a free trade agreement adopted by ten member countries of ASEAN and five other countries (Australia, China, Japan, South Korea and New Zealand). The agreement was signed on 15 November 2020.
  • However, during the 12th ASEAN Summit held in Cambodia in November 2012, the initial negotiations of the agreement were initiated. Its main objective is to liberalize and simplify trade rules between the participating members.
  • The agreement was not signed in November last year due to India’s separation from the RCEP, but this year 15 other countries have signed the agreement except India.
  • RCEP countries represent one-third of the world’s population and 30% of global GDP (more than about 26 trillion), and these countries are inhabited by about 2.2 billion consumers.

Why did India stay out of the RCEP DEAL?

  • Prime Minister Narendra Modi has always insisted on an ‘Act-East Policy’. Joining the RCEP may affect the ‘Act East Policy’, as India will have to remove tariffs on 90 percent of goods coming from ASEAN countries, Japan and South Korea in order to join the RCEP.
  • In addition, 74 percent of goods from China, Australia and New Zealand were to be tariff free, so India feared that its market would be filled with cheap Chinese goods.
  • Also, the entry of New Zealand dairy products into the Indian market was also expected to harm the interests of Indian farmers, which is why last year’s farmer organizations opposed India’s involvement in the RCEP.

Association of Southeast Asian Nations, ASEAN

ASEAN is an organization of Southeast Asian countries. Its full name is Association of South East Asian Nations. The 10 member countries of ASEAN include Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Cambodia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

Source- The Hindu

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