The impact of India's absence of RCEP on Indo-Pacific economic cooperation

International Journal of Economics and Management Studies

© 2021 by SSRG - IJEMS Journal

Volume 8 Issue 2

Year of Publication : 2021

Authors : Shyi-Min Lu

10.14445/23939125/IJEMS-V8I2P119

How to Cite?

Shyi-Min Lu, "The impact of India's absence of RCEP on Indo-Pacific economic cooperation," SSRG International Journal of Economics and Management Studies, vol. 8,  no. 2, pp. 130-134, 2021. Crossref, https://doi.org/10.14445/23939125/IJEMS-V8I2P119

Abstract:

The purpose of this article is to analyze India's economic influence in RCEP through simulation. First, in the RCEP16 simulation, the actual GDP change results are ASEAN +6.0%, Japan +5.1%, China +4.9%, South Korea +7.2%, Australia +3.2%, New Zealand +3.0%, India + 7.1%, so RCEP16 proved that it can bring huge economic benefits to participating countries. However, if India does not participate in the RCEP, it will lose a lot of opportunities, especially the economic improvement effect of GDP +7.1%. In RCEP15, India will suffer a 0.2% negative impact, while the rest of the countries will have recovery benefits, especially after the COVID-19 epidemic. This means that trade barriers between RCEP member-countries other than India will be reduced, and their import prices will be lowered, so the import destinations will be changed from India to other countries. This is because RCEP participating countries will produce a "trade order transfer effect." Third, India's RCEP withdrawal will reduce the overall economic pulling effect in the Indo-Pacific region. Taking GDP as an example, ASEAN (6.0%→5.4%), China (4.9%→4.6%), and South Korea (7.2%→6.5%) mean that many relatively negative effects will be made from RCEP 16→ RCEP 15.

Keywords:

RCEP, India, Japan, FTA, Indo-Pacific Economic Cooperation Organization.

References:

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