Next, I want to focus on India. India’s high tariffs have always been an important factor affecting customers’ imports.
However, although India is currently unable to sign an agreement with the signatories of RCEP, each member confirms that the agreement will remain open to India’s accession from the date of entry into force. At any time after the signing of the RCEP agreement, as long as India submits a written application that it wishes to join, RCEP The signatories will start negotiations with India. At any time before India’s accession to the agreement, India can participate in RCEP meetings and economic cooperation activities held by RCEP signatories as an observer. This fully demonstrates the expectations of all parties in RCEP towards India as a big country.
An important reason why India has not joined the agreement is that after joining the agreement, due to tax cuts, imports from other countries will increase, and some industries may increase the deficit. In fact, India has a surplus in trade in services, and its current account deficit only accounts for 1.7% of GDP (2018). At the same time, RCEP also has some special regional safeguard measures, such as stipulating that after importing countries reduce tariffs, if imports increase a lot and damage the domestic industry, the tariffs can be restored to the original MFN level. This is actually a kind of safety valve, which can solve the worry about the impact on the domestic industry.
Asia, North America, and Europe are the world’s three largest economies, but for a long time the process of economic integration in Asia has lagged far behind North America, which has a free trade framework, and Europe, which has a supranational entity, the European Union. The signing of RCEP not only provides new impetus and confidence for world economic growth, it is also of great significance to the economic integration of East Asia and Asia.
Hope that RECP will take effect as soon as possible to benefit member countries, Asia and the world economy. Hope that tariffs will no longer be a stumbling block to our develop our business.