The Regional Comprehensive Economic Partnership (RCEP) Without Indian Participation: Can It Work as a Mega FTA?

There is no doubt that global trade has contributed to rapid global economic growth over the last five decades. However, trade growth slowed after the global financial crisis; while it started to recover several years after the crisis, it has again declined since 2017 due to the trade conflict between the U.S. and China, as well as other major trade partners such as the European Union (EU), Japan and Korea. The Trump administration regarded the World Trade Organization (WTO) as acting contrary to U.S. economic interests and tried to limit its arbitration function to trade negotiations and conflicts occurring between corporations rather than states. Despite the U.S.’ attempt to weaken the WTO’s functions, the rest of the world has tried to restore the WTO’s role in free trade and multilateralism. To overcome U.S. unilateralism, many major economies have established mega free trade agreements (FTAs) such as the EU-Japan FTA, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP). The 15 states in the RCEP agreed to complete it in 2020, signing without the participation of India—the third largest economy in Asia— although it had been part of the negotiations since 2011. Despite the absence of India, the RCEP will be the largest mega FTA in the world, covering over 30% of global gross domestic product (GDP), and contributing to strengthened regional economic integration and growth. This article explores whether the RCEP can function properly in the absence of India and examines why India decided not to participate. Furthermore, it investigates and analyzes how the RCEP will develop without Indian participation. Last, it discusses how to set the relationship as a competitor with the CPTPP given the overlapping memberships of participating states.