The Comprehensive Economic Partnership Agreement (CEPA) is a concept representing a broad-based bilateral or regional trade agreement that signifies a deeper level of economic integration than a traditional Free Trade Agreement (FTA). The concept emerged to solve the problem of limited trade liberalization by moving beyond just tariff reduction on goods to encompass a wider spectrum of economic cooperation.
The mechanism of a CEPA works through key provisions that cover multiple areas of economic activity. These typically include the reduction or elimination of tariffs on goods, the liberalization of trade in services, provisions for investment protection and facilitation, and clauses on Intellectual Property Rights (IPR). For instance, the India-UAE CEPA, signed on February 18, 2022, and effective from May 1, 2022, covers almost all tariff lines and includes chapters on Trade in Goods, Rules of Origin, Trade in Services, and a dedicated chapter on Digital Trade.
CEPA is structurally more expansive than a Comprehensive Economic Cooperation Agreement (CECA), which generally focuses only on trade tariffs. India has operational CEPAs with key partners, including the one with South Korea, which came into effect on January 1, 2010, and the one with the UAE. The recent India-UAE CEPA was a significant development, being the first major FTA signed by India in a decade, and its inclusion of Digital Trade and the Movement of Natural Persons reflects an evolution in the scope of these agreements.