What's the RCEP and what does India's exit mean for the trade deal?

India pulled out of the deal saying it wanted to protect service workers and farmers.

Business Standard : When it comes to sweeping global free-trade agreements, President Donald Trump isn’t the only party-pooper. Two years after Trump withdrew the U.S. from a 12-nation deal known as the TPP, Prime Minister Narendra Modi has pulled India out of a 16-nation grouping led by China known as the RCEP. In both cases, protectionism played a part; in both cases, the show goes on.

1. What is the RCEP?

What began in 2012 as a routine harmonizing of agreements between members of the Association of Southeast Asian Nations, or Asean, turned into a deal creating potentially the world’s biggest free trade bloc. The Regional Comprehensive Economic Partnership, to give its full name, is aimed at strengthening trading ties among China and others with Asean members. Broadly speaking, it would lower tariffs and other barriers to the trade of goods among the 16 countries that were in, or had existing trade deals with, Asean.

2. But that’s now down to 15 nations?

Correct. India pulled out in November saying it wanted to protect service workers and farmers. There were also worries the country would be flooded by cheap goods from China. Modi had pushed the other nations to address concerns over deficits and to open their markets to Indian services and investments.

3. Is India’s loss a big deal?

It would have been the third-biggest economy in the RCEP, so yes. On the other hand, China has been seeking to tie up the deal expeditiously as the country faces slowing growth from a trade war with the U.S. It is also looking to further integrate with regional economies just as the Trump administration urges Asian nations to shun Chinese infrastructure loans and 5G technology. China says India is welcome to come back aboard whenever it’s ready.

4. What’s different about the RCEP?

Unlike the TPP and other U.S.-led trade deals, the RCEP wouldn’t require its members to take steps to liberalize their economies, protect labor rights and environmental standards and protect intellectual property. According to U.S. Commerce Secretary Wilbur Ross, it’s a “very low-grade treaty” that lacks the scope of the Trans-Pacific Partnership, or TPP.