CECA and CEPA are two agreements centered on improving the economic relations between provinces, their territories, and the countries that agreed to it. These agreements have helped all their member nations involved by increasing trade and international investment between the countries. However, there exist stark differences between these two trade agreements.
CECA vs CEPA
The main difference between CECA and CEPA is that these two agreements are different in terms of the economic focus and their outcome. CECA primarily focused on reducing the tariff on trade, while CEPA mainly focused on reducing the tariff on other factors along with trade, such as services and investments made by the signing countries. However, both are meant to develop economic relations between the agreeing parties.
The Comprehensive Economic Cooperation Agreement (CECA) was signed as an agreement to promote free trade between the governments of Canada and the Association of Southeast Asian Nations (ASEAN). The agreement lowered tariffs and created a more open market between the two countries, and thus expanded both economies.
The Comprehensive Economic Partnership Agreement (CEPA) is an agreement signed by two countries to promote free trade. It was signed between Singapore and India. The agreement was signed on 2 April 2003 at the 10th ASEAN-India Summit in Bali, Indonesia. The CEPA not only deals with traditional trade barriers such as tariffs but also covers non-tariff barriers and issues such as services, investment, intellectual property, and business practices.
Comparison Table Between CECA and CEPA
| Parameters of Comparison | CECA | CEPA |
| Full-Form | CECA is the abbreviation of Comprehensive Economic Cooperation Agreement. | CEPA is the abbreviation of Comprehensive Economic Partnership Agreement |
| Concept | CECA as the name suggests encourages the idea of cooperation between two countries. It is a looser approach. | CEPA promotes partnership between two countries. It is a more intimate relationship. |
| Meaning | Agreement to reduce or eliminate tariffs on trade goods. | Agreement to reduce or eliminate the tariff on trade goods and also services. |
| Signed on | It was signed by India in October 2010 with Malaysia. | It was signed by India in August 2009 with Korea. |
| Includes | Does not include investments made by partner countries. | Includes investments made by partner countries. |
What is CECA?
CECA was signed on Jan. 28, 2009, and took effect on Dec. 31 of that year. CECA was in effect till the year 2018 as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) replaced it in 2018.
The Comprehensive Economic Cooperation Agreement (CECA) was an economic pact between countries of the Association of Southeast Asian Nations (ASEAN) and the People’s Republic of China for greater economic cooperation and integration. There are currently ten member countries in the ASEAN and six in the PRC. The agreement was considered to be the world’s second-largest trade bloc after NAFTA, according to the World Trade Organization’s (WTO) 2013 statistics.
This was a trade deal between Mexico, Canada, and the United States that lowered tariffs and created a common set of trade rules. It’s meant to encourage trade and bring economic opportunities among the 3 countries. This deal was expected to grow the three countries’ economies by increasing their interdependence with each other.
It also opens up certain sectors for cross-border investment. The main sectors the trade deal covers are agriculture and food, energy, and industrial goods. It’s an ambitious agreement that not only covers some sectors in the three countries but also attempts to harmonize regulatory frameworks. It’s was expected to be ratified by the end of 2018, as so it was.
What is CEPA?
Comprehensive Economic Partnership Agreement has been signed by many countries to boost trade relations between them. For example, the India-Sri Lanka Comprehensive Economic Partnership Agreement (CEPA) is a wide-ranging bilateral agreement whose motive was to remove tariff and non-tariff obstacles to trade in goods and services between the two countries.
CEPA, which was signed in Colombo on July 29, 2005, was the first such bilateral pact Sri Lanka entered with a country other than India. The Comprehensive Economic Partnership Agreement was also made by the countries of Brunei, Chile, New Zealand, Peru, and Singapore.
Its main aim is to increase trade between the parties involved. It also promotes the growth of each country’s business as well as employment. The next main aspect of the agreement is that it establishes an alliance that will be considered a dynamic and modern trading hub. It will be a place where the countries can promote their business growth and expand the reach of their investment.
This will lead to a more prosperous future for each country in the partnership. In general, it is a wider aspect than CECA as it includes services and investments made by partner countries as well.
Main Differences Between CECA and CEPA
- The CECA is an economic agreement, and it is meant to promote the ‘total trade’ of goods and services between Australia, New Zealand, and the Association of Southeast Asian Nations (ASEAN) countries. The CEPA, on the other hand, is a trade and economic agreement between the countries of the ASEAN and the People’s Republic of China.
- Comprehensive Economic Cooperation Agreement is an agreement between countries that lower trade tariffs, while Comprehensive Economic Partnership Agreement is an agreement between countries that lower trade tariffs but also lower production barriers between countries.
- CECA is signed by countries before the signing of CEPA.
- India signed CECA with counties like Malaysia, Singapore, and other ASEAN countries. India has signed CEPA with Japan, Sri Lanka, and Korea.
- CECA or Comprehensive Economic Cooperation Agreement was introduced as a concept much before CEPA or Comprehensive Economic Partnership Agreement.
Conclusion
It is important to know the differences between CECA and CEPA to understand what relations are present between countries and how trade relations score between them. Both of the agreements will reap significant benefits for both parties, but there are slight differences between the two.
Comprehensive Economic Cooperation Agreement is a pact between the two countries to reduce tariffs, promote investment and trade, and open up the services industry. Comprehensive Economic Partnership Agreement is a pact between the two countries to reduce tariffs and promote investment and trade. It is an upgrade to the Comprehensive Economic Cooperation Agreement.
References
- https://www.jstor.org/stable/48531356
- https://www.elgaronline.com/view/edcoll/9781782548959/9781782548959.00016.xml