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Trans-Pacific Partnership (TPP)

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Trans-Pacific Partnership (TPP)

The TPP (Trans-Pacific Partnership) is a new mega-regional agreement. The 12 Pacific Rim nations (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam) signed the TPP agreement on 5 October 2015. It is likely to set higher standards for goods and services trade and is considered a mega regional FTA which can be a pioneer in many ways and is likely to be a gamechanger for the world economy and global trade.

The block accounts for around 40 per cent of global GDP and around 60 per cent of merchandise trade. In terms of economic size, it is larger than the existing NAFTA (North America Free Trade Area). The agreement is very comprehensive and not only encompasses the scope of tariff-eliminating mega regional trade pacts, but also aims at—

(i) setting higher global standards for international trade through lower benchmarks for non-tariff barriers;
(ii) more stringent labour and environment regulation;
(iii) higher IPRs (intellectual property rights) protection;
(iv) greater transparency in government procurement and limiting advantages to state-owned enterprises (SoEs);
(v) transparency in health care technology, competitiveness and supply chain.
(vi) it also includes new and emerging trade issues and cross-cutting concerns such as internet and digital economy and participation of state-owned enterprises (SoEs) in global trade and investment.

Experts have highlighted a serious impact on the current global trade pattern once this agreement comes into force. India has its own share of concerns regarding it22. Meanwhile, by late January 2017, the USA (under its new President Mr. Donald Trump) pulled out from the ongoing negotiations of the TPP. Once the US (the biggest force behind it) has opted out from it, the pact looks losing its real steam. This may look a relief for India and other similar economies it may be temporary—as the new dispensation in the country has given clear signs of becoming protective regarding trade and globalization (these issues were the benchmark of Trump’s presidential election campaign).

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