Bangladesh’s Plan to join China-Backed RCEP Worries India

Context: India to reconsider its proposed Free Trade Agreement talks with Bangladesh if it moves ahead with its plan to join the China-backed RCEP (Regional Comprehensive Economic Partnership) bloc.

Bangladesh decides to join China-Backed RCEP

• Both Countries agreed to start negotiations on an India-Bangladesh Comprehensive Economic Partnership Agreement (CEPA)  in September 2022.
• Bangladesh point of view: Bangladesh is pursuing free trade pacts to maintain preferential access to the  markets of its partner countries after it gains developing country status in 2026.
  •  As an LDC member of the South Asia Free Trade Agreement (SAFTA), Bangladesh enjoys duty-free quota-free access for most of its items into the Indian market, which it would lose after 2026.

Why is Bangladesh joining RCEP a concern for India?

• Circumventing rules of origin ( ROO): The India-Bangladesh FTA could facilitate the flow of Chinese goods into India from Bangladesh through the FTA route, burdening Indian markets and affecting Indian industries.
  • India withdrew from RCEP negotiations precisely because of the concern surrounding the misuse of the ROO provisions. 
  • Rules of origin: It is a Rule or criteria which will be used to determine the national source of a product.

About RCEP

• RCEP is a 15-member regional free trade agreement  between the Association of Southeast Asian Nations and ASEAN’s free trade agreement partners (Australia, China, Japan, New Zealand and the Republic of Korea.
• India withdrew from RCEP negotiations in November 2019.
• RCEP is the world’s largest free trade agreement by members’ GDP.
• It is estimated that through its trade liberalizing provisions RCEP could lead to income gains of over $200 billion by 2030 and add $500 billion to world trade.

Also Read: China Celebrating 10th Anniversary Of Belt And Road

News source: the hindu