 "'Trans-Pacific deal wake-up call for India, no need to panic'")
The Trans-Pacific Partnership (TPP) agreement reached among the US, Japan and 10 other Pacific Rim countries should be a wake-up call for India to improve its export quality and move beyond age-old notions of tariffs and market access, say experts.
The TPP negotiations, which concluded in the US on Monday, had started in 2010 with the objective of expanding the Trans-Pacific Strategic Economic Partnership Agreement, which was signed by Brunei, Chile, Singapore, and New Zealand in 2006.
Later, it was joined by the US, Canada, Japan, Australia, Malaysia, Mexico and Peru. Finally, it became a grouping of 12-member countries.
Rahul Khullar, former commerce secretary and chief trade negotiator of India, believes TPP might result in "trade switching" wherein a partner country which is also a member of TPP will, instead of importing a product from India based on a certain tariff, prefer to buy it from another TPP nation for free. "There is certainly a worry that our exports to these countries might get impacted due to trade switching."
He also expressed doubts on the full implementation of the TPP now that US President Barack Obama is on his way out and the US Congress might not give its seal to the deal in the absence of a fast-track authority.
The US Congress would have to approve the deal first in order to be able to implement the deal. While concluding the talks, US Trade Representative Michael Froman said it would not happen before 2016. Around the same time, US presidential campaign will be at its peak. Hence, opposition to this deal is imminent. "We do not need to panic as yet. Clearly, the game has now changed. TPP will set in a certain benchmark of standards going into the global value chains and we are nowhere there. We are still into tariffs and market access. It is all about improving standards now. Market access in any of the TPP countries will not be easy anymore once the pact (TPP) is implemented," said Biswajit Dhar, professor of economics, Jawaharlal Nehru University.
'TRADE SWITCHING'
- TPP to impact Indian exports in terms of trade switching, say experts
- TPP requires approval from all respective member countries' Parliament
- US Congress unlikely to approve the deal with Presidential campaign in full swing
- 7 out of 12 TPP countries are also part of Regional Comprehensive Economic Partnership
