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India is better off not joining RCEP

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After recent months of back and forth attempting to negotiate a better trade agreement for India to join the Regional Comprehensive Economic Partnership (RCEP), the Indian government (and rightly so) decided not to join the trade forum and be excluded from what has been seen as one of the biggest plurilateral free-trade partnerships in the world.

The RCEP includes 16 nations that are home to more than half of the world’s population (10 of which belong to the Asean group), six of these include Free Trade Agreement partners, i.e. China, South Korea, India, Japan, Australia, New Zealand.

As a number of commentators may remain divided in analyzing both, the political and economic consequences of India’s action, it may be critical to address a more fundamental concern attached with the nature of trade agreements today (especially those involving many nations or are plurilateral in nature) and their complex dimensions.

The principle of comparative advantage realized from gains made from trade remain the ‘crown jewels’ of the economics vocation, and even though almost all economists agree that more trade makes a country relatively better off in the medium-to-long term, the instrument—a trade agreement, by which trade is facilitated remains under-emphasized.

Trade agreements today not only contain details on defining some of the terms of trade but on aggregate, reflect a........

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