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Trade Agreements may Benefit the Consumers and Service Agencies

Updated on November 4, 2019
hmkrishna profile image

The author is postgraduate in Botany and experienced in IPR handling as well as agribusiness management with an MBA, lives in a farmhouse.

Consumers in the third world countries

Trade across the different countries are benefitting the traders and consumers on one hand and expanding the markets for the producer companies with competitive progress and development.

The market should be competitive and products available at competitive prices from anywhere in the globe. The General Agreement on Tariffs and Trade (GATT) practices recommended by the World Trade Organisation in 1991 also advocates this. So, the Regional Comprehensive Economic Partnership (RCEP) is not for the first time, which has happened previously and also going to happen in the future, for the benefit of the consumer's worldwide. Because of this, consumers are able to get quality products from different countries in their market. The industries within the country have upgraded their quality and became globally competitive improving the quality and quantity of production to meet the global demand.

India has distanced away from the signing option and postponed it until certain disparities are sorted-out. This is mainly because the Government of India wanted the benefits of small farmers, small and micro enterprises as well as for overcoming the imbalances due export-import because of 2010 free trade agreement with ASEAN countries and China.

The free trade agreement partner countries including China, India, Japan, South Korea, Australia and New Zealand have also joined hands with the ASEAN countries to unite for the RCEP agreement. Among these China is in fore-front, followed by Japan and India.

Now, this agreement has the objective of overcoming Western dominance in controlling the trades and markets. There is a strong feeling among these countries in the Eastern globe to overcome this control. The American, the English and the Middle East trade houses controlled the movement of products across the globe. Most of the economic analysts predict that the agreement will lead into Chinese dominance of trade but we have to wait and see what happens after the agreement. There is no doubt that cheaper products from China will flow into all these countries, much more than ever before. At the same time, there are many more products which are specific to each of these countries which will find new and emerging international markets. We have to keep in mind regarding the point that, ultimately the consumers will be benefited.

Regional Comprehensive Economic Partnership

Regional Comprehensive Economic Partnership (RCEP) is going to be signed between 16 member countries in the near future. Member countries included 10 ASEAN countries and 6 partnership countries. RCEP plan was conceived in 2012 during the ASEAN summit at Cambodia. It is one of the important milestones in economic reforms at the global level. It is said to be the largest trade agreements, which have ever taken place.

Globally the Eastern economy is going to emerge with the 16 countries signing into this agreement as to the largest economic unity. According to some of the economic analysis, it is going to be a Chinese centred economy.

Association of Southeast Asian Nations (ASEAN) has members from the southeast Asian countries. These include Indonesia, Thailand, Singapore, Philippines, Malaysia, Vietnam, Brunei, Cambodia, Myanmar and Laos. The ASEAN headquarters is located in Bangkok, Thailand. Now South Asian countries are very much enthusiastic for getting the agreement signed. ACP headquarters is located in Thailand.

India has demanded:

  • Base year should be the current year of the agreement.
  • There should be a balance between gross exports and imports.
  • In the event of dumping due to imports, there must be an option for imposing a duty on such imports.
  • Addition or deletion of items of import can be done if it is necessary for the future.
  • There must be a provision for opting out from the agreement in the future if it is necessitated on countries welfare.

Each country has different currencies and huge variation in international exchange rates. Photo: Indian currency for representational purpose only
Each country has different currencies and huge variation in international exchange rates. Photo: Indian currency for representational purpose only

Service partnership

When the trade increases it requires the logistics accounting and legal support as well as networking agencies. We have witnessed the emergence of the BPOs in India in the recent past. Among Asian countries, India, Thailand, Singapore and the Philippines have the most of the English speaking population. All the other countries are prominent with their own language and culture. Probably Philippines Island in India cheapest among service cost and availability of the labour force. as for as a software and the connectivity are concerned India is among the cheapest and available platform.

Losers

The coin has always two sides and therefore along with each positive opportunity, there will also be some negative drawbacks. Success in the utilisation of opportunities and taking benefit of the situation for materializing the goal. Each of the member countries has got their own currencies, their own languages and culture their own set of climates and also the natural inhibition and geographical barriers. Keeping in mind all the available opportunities, there is always hope for smarter workgroups.

Some of the minor countries have to depend upon the larger player. It is quite natural that the businessman never like falling prey for the terrorists or to the atrocities of underworld smuggling racket. So we can anticipate positive sign in this aspect also. Whatever goods which were earlier illegally trafficked, will all come to the legal channel and to the mainstream, ultimately giving proper trade data to the world trade organization and the exchange benefits to the deserved agencies. In that way the foreign exchange and the economic growth in terms of GDP are going to get transparent visibility at the global level. In these countries, the think tanks and the intelligent people associated with commerce advisory the governments are taking appropriate steps. These also include listing out of commodities which will not come under this agreement, to protect the internal market.

Hope for a better tomorrow

Foreseeing the global competition and the dependency of the small scale producers, absolutely on these products, these member countries are preparing such lists before the agreement. Thus, safeguarding the interests of the citizens becomes the topmost priority of each of the countries. So there is no room for fear, but there is ample room for the growth of the market in the future.

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2019 Halemane Muralikrishna

Comments

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    • hmkrishna profile imageAUTHOR

      Halemane Muralikrishna 

      4 months ago from South India

      I have updated the article based on recent changes.

    • Prantika Samanta profile image

      Prantika Samanta 

      5 months ago from Kolkata, India

      The article describes the importance of RCEP and why it is required and how will it benefit consumers. A great read.

    • hmkrishna profile imageAUTHOR

      Halemane Muralikrishna 

      5 months ago from South India

      Thank you Mr Swapnil, your observations are true.

    • Swapnil Ghosh profile image

      Swapnil Ghosh 

      5 months ago from Kolkata

      Global trade is very important and so are trade agreements. Ofcourse the first world countries have an edge over us but it won't be long when we too (the asian counterparts) will become equal, if not better.

      Thanks for providing substantial knowledge on the topic.

    • hmkrishna profile imageAUTHOR

      Halemane Muralikrishna 

      5 months ago from South India

      Thank you Ms Vineeta, it is based on one farmers apprehension and some media publications. Due to social media, people are more empowered these days.

    • VineeWrites profile image

      Vineetha 

      5 months ago from NAVI MUMBAI

      This article was quite the eye opener. You are so versatile. You are able to write on so many different topics, and that too so descriptively. Amazing.

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