Central Idea
- Sri Lanka and Bangladesh are considering joining the Regional Comprehensive Economic Partnership (RCEP) after India’s withdrawal from the trade agreement in 2019.
Recent update on RCEP
- Sri Lanka’s Application: Sri Lanka has applied for RCEP membership and seeks support from China, Malaysia, Indonesia, Japan, and Thailand.
- Bangladesh’s Decision: Bangladesh is expected to make a final decision on RCEP membership after its elections in January 2024.
What is Regional Comprehensive Economic Partnership (RCEP)?
| Scope | Free trade agreement among 15 Asia-Pacific countries |
| Member Countries | Australia, Brunei, Cambodia, China, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, Philippines, Singapore, South Korea, Thailand, Vietnam |
| Negotiations and Signing | Negotiations started in 2012,
Officially signed on November 15, 2020 |
| Entry into Force | Effective from January 1, 2022 |
| Objectives | Reduce trade barriers, promote economic growth, enhance economic cooperation |
| Trade Facilitation | Includes tariff reductions, trade in services, rules of origin, customs procedures, and trade remedies |
| Market Access | Improves market access for goods and services among member countries |
| Accession Rules | Expected to be finalized by 2024 |
| Global Significance | Significant due to large economies like China, Japan, and South Korea |
| India’s Withdrawal | India initially participated but withdrew in 2019 citing concerns about trade deficits and domestic industries |
India’s Stance on RCEP
- Past Withdrawal: India withdrew from RCEP talks in 2019 due to concerns over services mobility, potential flood of Chinese goods, and objections from domestic agriculture and small businesses.
- No Indication of Return: India has not indicated any reconsideration of its decision to withdraw from RCEP.
Reasons for Sri Lanka and Bangladesh’s Interest
- Learning from Crisis: Sri Lanka realizes the importance of regional markets during crises and hopes to spread its market and enhance competitiveness.
- Bangladesh’s Graduation: As Bangladesh approaches graduation from the list of Least Developed Countries in 2026, joining RCEP could offset potential export losses and simplify FTA negotiations.
