17th ASEAN-India Summit: What is RCEP Agreement?

On 12 November 2020, India participated in the 17th ASEAN-India Summit at the invitation of Vietnam, the current chair of ASEAN. The Summit focussed to create strategies and measures to recover the economic loses due to COVID-19 pandemic and the RCEP agreement was signed virtually by 15 countries.
Created On: Nov 17, 2020 17:35 IST
Modified On: Nov 17, 2020 18:04 IST
RCEP Agreement
RCEP Agreement

On 12 November 2020, Prime Minister Modi virtually participated in the 17th ASEAN-India Summit at the invitation of Vietnamese Prime Minister Nguyen Xuan Phuc, the current chair of ASEAN. The Summit saw the participation of all ten ASEAN members.  

The 17th ASEAN Summit focussed to create strategies and measures to recover the economic loses due to COVID-19 pandemic. 

Speaking at the Summit, Prime Minister Modi underlined the centrality of ASEAN in Act East Policy of India. He stated that a cohesive, responsive and prosperous ASEAN is central to India's Indo-Pacific Vision and contributes to Security And Growth for All in the Region (SAGAR).

He further underscored the importance of strengthening convergence between India's Indo-Pacific Oceans Initiative (IPOI) and the ASEAN Outlook on Indo-Pacific, to ensure a free, open, inclusive and rules-based Indo-Pacific region. 

Speaking on the ongoing COVID-19 pandemic, he highlighted India's response and support to the International community and welcomed initiatives of the ASEAN members in fighting the pandemic.

About RCEP

1- It was signed virtually on November 15, 2020, by 15 nations in the ASEAN Summit. 

2- The Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement in the Asia-Pacific region between the ten ASEAN Members and five of their FTA (Free Trade Agreements) partners-- Australia, China, Japan, New Zealand, and South Korea. 

3- The signatories of RCEP are:

1- Australia
2- Brunei
3- Cambodia
4- China
5- Indonesia
6- Japan
7- Laos
8- Malaysia
9- Myanmar
10- New Zealand
11- Philippines
12- Singapore
13- South Korea
14- Thailand
15- Vietnam

4- It is the first free trade agreement between China, Japan, and South Korea (three of the four largest economies in Asia), and is the first multilateral free trade agreement to include China.

5- RCEP is intended to reduce tariffs and red tape. The agreement does not focus on labour unions, environmental protection, or government subsidies.

6- The RCEP member nations make up around a third of the world's population and account for 29% of global GDP. 

7- India was also part of the negotiations, but it pulled out in 2019 over concerns that lower tariffs could hurt local producers. However, the signatories of the deal stated that the door will remain open for India to join in the future.

8- The new free trade bloc will be bigger than both the US-Mexico-Canada Agreement and the European Union.

Key Highlights of 17th ASEAN Summit:

1- Prime Minister Modi announced USD 1 million to the COVID-19 ASEAN Response Fund.

2- India offered USD 1 billion Line of Credit to support ASEAN connectivity

3- A new ASEAN-India Plan of Action for 2021-2025 was adopted at the 17th ASEAN Summit. 

4- India would explore ways to increase trade despite its exit from the 15-nation RCEP agreement in 2019. 

On 15 November 2020, RCEP free trade agreement was signed between Australia, South Korea, Japan, and the ASEAN Members.

5- The Summit also covered discussions on maintaining and promoting peace, stability, safety and security in the South China Sea, and ensuring freedom of navigation and overflight.

6- The importance of promoting a rules-based order in the region including through upholding adherence to international law, especially the United Nations Convention on the Law of the Sea (UNCLOS) was also highlighted. 

7- India underscored the importance of diversification and resilience of supply chains for post-Covid-19 economic recovery. 

8- India called for an early review of  ASEAN-India Trade in Goods Agreement (AITIGA), which is pending for a long time.

About ASEAN

1- On 8 August 1967 in Bangkok, Thailand, ASEAN was set up with the signing of the ASEAN Declaration (Bangkok Declaration) by the founding fathers of ASEAN, namely Indonesia, Malaysia, Philippines, Singapore and Thailand. 

2- It is a regional grouping, constituted to promote economic, political, and security cooperation.

3- ASEAN Members are as follows: 

Country Name

Capital

Joined ASEAN

 1. Brunei

Bandar Seri Begawan

7 January 1984

 2. Cambodia

Phnom Penh

30 April 1999

 3. Indonesia

Jakarta

8 August 1967

 4. Laos

Vientiane

23 July 1997

 5. Malaysia

Kuala Lumpur

8 August 1967

 6. Myanmar

Naypyidaw

23 July 1997

 7. The Philippines

Manila

8 August 1967

 8. Singapore

Singapore

8 August 1967

 9. Thailand

Bangkok

8 August 1967

 10. Vietnam

Hanoi

28 July 1995

4- The Chairmanship of the ASEAN rotates annually based on the alphabetical order of the English names of Member States.

5- ASEAN member nations have a total population of 650 million people and a combined GDP of USD 2.8 trillion. 

6- India is the 4th largest trading partner in ASEAN with about USD 86.9 billion trade. 

List of Five Summits, India to participate in November 2020

List of Members of ASEAN Organisation

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