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RCEP Mirage


The ‘Regional Comprehensive Economic Partnership’ (RCEP) is being billed as the next big thing in global growth. Comprising around 30 percent of the world’s economy, it is expected to push other major entities like the US and the European Union into the background. It comes at a time when four years of President Trump had seen the US withdrawing from a number of international agreements that were thought to be detrimental to American interests. Even a ‘successful’ union such as the EU has seen Britain opting out for a number of reasons. India, though initially involved in the negotiations on RCEP has chosen not to get involved, having experienced China’s continued belligerence on its borders. This has divided ‘experts’, some who believe it is the right decision, while others feel it will impact the economy adversely.

Important economies like Japan and South Korea have joined the new entity in the belief that their economies are strong enough to withstand China’s manipulative tactics, while the smaller countries like Vietnam, Philippines, etc., are hoping to ride the bandwagon to success, as the biggies battle it out. Proximate ‘supplier’ nations such as Australia and New Zealand are already greatly dependent on the Chinese market and despite tall talk, cannot afford to delink. They are going in simply hoping for the best.

The question is – does China’s politics matter or not? Would all these so called liberal and democratic nations have done business with a nation whose economy was built upon slave labour? Or, was run by the Nazis? Perhaps, very cynically, they would have found some way to do it, but it would not have been morally justified. China is a totalitarian state, whose citizens enjoy zero political freedom. Xi Jinping exercises no less power than Hitler. How is it any different from North Korea, except it has far greater resources and is much more powerful? Should the world not be ostracizing this country, instead of enabling it in some many ways?

People around the world should be happy that India, with all its supposed under-performance in the economic field, has the political gumption to stay clear of this agreement. Apart from the fact that it will take many years before RCEP becomes a truly functional entity, it will require China to become an honest player. Unfortunately for it, it can’t, because it has built up its economy to a very large extent on skullduggery and rules violation. The agreement will by no means compensate for the market it will lose in India in the next few years, especially in terms of future growth. India’s dependence on China is comparatively limited. The future will offer better choices. In fact, RCEP, in its present configuration, is no choice, at all.