Wobbling RCEP gives greater leeway for India-USA trade agreement

India opted out of  RCEP and now it is Japan, who has followed suit. After long seven years intensive negotiation among  ASEAN 10 + 6 for the world biggest trade block to reign Asia-Pacific region and a challenge  to TPP, RCEP ( Regional Comprehensive Economic Partnership) is in tailspin before launching. The reason is China’s over-influence in the block.      

Japanese Deputy Minister for Economy, Trade and Industry Hideki Makihara, said in an interview with Bloomberg. “We aren’t thinking about that at all yet – All we are thinking of is negotiations including India.” India opted out because its main concerns were not addressed, which erupted in the wake of large influence by China.  Now, Japan also refuses to join the block, presumably fearing  Chinese fear with India leaving, since it weighed a  collateral safeguard to Japan by countering China. Makihara was hopeful, saying “Japan will continue to try to persuade India to join.”  

For years, India shot down FTA with USA. Earlier, USA was eager and India was cool. . Former US Ambassador to India Kennth Juster mulled for FTA between USA and India. Situation made a voltae-face, after USA became the biggest trading partner of India in 2018-19. Hitherto, China was the biggest trading partner of India for over five years. With USA becoming biggest trading partner, reflecting an hope for  better market accessibility, India’s bent towards USA for a new trade deal portend  potential  for expansion of exports.

  The silver line of the trade structure with two large trading partners is that while China’s rise in the rank was demonstrated by gushing exports to India, USA’s rank up was geared by importing more from India.  This sent a message that FTA could be more beneficial with USA. Anecdotal evidences show that with whomsoever India engaged in FTAs, it had trade deficit.

Given this new emerging scenario of trade relation with USA, question arises should India focus on FTA with USA, which can provide a sustainable growth in export.

To this end, Commerce Minister Piyush Goyal’s endeavor to embrace new trade deal with USA is justified, despite several niggling issues. In US-India Strategic Partnership Forum, he decoded that both countries have agreed to broad contours of proposed trade packages, after closing the pending gaps.

Export has globally been recognized a strong parameter for world economic growth. To this end, India’s lackluster growth in exports has been lamented.  

The writer is an adviser to Japan External Trade Organisation (JETRO) India is the fastest growing economy in the world. Albeit, its export growth was sagging in post 2011. One reason is international trade still receives low attention, both in public and private sectors. Given export becoming a trigger to resuscitate the  economy, government set a target of doubling exports by 2025.

 

Wobbling RCEP gives greater leeway for India-USA trade agreement

India opted out of RCEP and now it is Japan, who has followed suit. After long seven years intensive negotiation among ASEAN 10 + 6 for the world biggest trade block to reign Asia-Pacific region and a challenge to TPP, RCEP ( Regional Comprehensive Economic Partnership) is in tailspin before launching. The reason is Chinas over-influence in the block. Japanese Deputy Minister for Economy, Trade and Industry Hideki Makihara, said in an interview with Bloomberg. We arent thinking about that at all yet All we are thinking of is negotiations including India. India opted out because its main concerns were not addressed, which erupted in the wake of large influence by China. Now, Japan also refuses to join the block, presumably fearing Chinese fear with India leaving, since it weighed a collateral safeguard to Japan by countering China. Makihara was hopeful, saying Japan will continue to try to persuade India to join. For years, India shot down FTA with USA. Earlier, USA was eager and India was cool. . Former US Ambassador to India Kennth Juster mulled for FTA between USA and India. Situation made a voltae-face, after USA became the biggest trading partner of India in 2018-19. Hitherto, China was the biggest trading partner of India for over five years. With USA becoming biggest trading partner, reflecting an hope for better market accessibility, Indias bent towards USA for a new trade deal portend potential for expansion of exports. The silver line of the trade structure with two large trading partners is that while Chinas rise in the rank was demonstrated by gushing exports to India, USAs rank up was geared by importing more from India. This sent a message that FTA could be more beneficial with USA. Anecdotal evidences show that with whomsoever India engaged in FTAs, it had trade deficit. Given this new emerging scenario of trade relation with USA, question arises should India focus on FTA with USA, which can provide a sustainable growth in export. To this end, Commerce Minister Piyush Goyals endeavor to embrace new trade deal with USA is justified, despite several niggling issues. In US-India Strategic Partnership Forum, he decoded that both countries have agreed to broad contours of proposed trade packages, after closing the pending gaps. Export has globally been recognized a strong parameter for world economic growth. To this end, Indias lackluster growth in exports has been lamented. The writer is an adviser to Japan External Trade Organisation (JETRO) India is the fastest growing economy in the world. Albeit, its export growth was sagging in post 2011. One reason is international trade still receives low attention, both in public and private sectors. Given export becoming a trigger to resuscitate the economy, government set a target of doubling exports by 2025.