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What is the TPP?

Trans-Pacific Partnership (TPP) is a trade agreement between several Pacific Rim countries concerning a variety of matters of economic policy.

The aims of the TPP include the lowering of barriers to trade in goods and services, reducing tariffs to zero by 2015. In addition, the TPP hopes to promote investment and job creation in member states.

 

How does it come into reality?

TPP initially called the Trans-Pacific Strategic Economic Partnership Agreement, the pact began as a 2005 trade agreement between Brunei, Chile, New Zealand and Singapore in an effort to integrate their economies, drive growth and create unified regulations.

In 2008, during the Bush administration, the U.S. joined talks to expand the agreement, along with Australia, Peru and Vietnam. The U.S. trade representative under Obama, Ron Kirk, declared the American interest in forging a broad-based regional pact.

Then, in 2010, under the new name the Trans-Pacific Partnership, Malaysia entered the discussions, followed by Canada and Mexico in 2012.

By 2013, Japan began participating in the talks. South Korea and Taiwan have subsequently announced their interest but not formal participation.

Though all of the negotiating parties belong to the Asia-Pacific Economic Cooperation forum (APEC), the TPP is a separate initiative but with similar goals as APEC’s proposed Free Trade Area of the Asia Pacific.


 


 

Why the Trans-Pacific Partnership Matters?

The Pacific accord would phase out thousands of import tariffs as well as other barriers to international trade, like Japanese regulations that keep out some American-made autos and trucks.

It also would establish uniform rules on corporations’ intellectual property, and open the Internet even in communist Vietnam.

It eventually would end more than 18,000 tariffs that the participating countries have placed on American exports, including autos, machinery, information technology and consumer goods, chemicals and agricultural products as varied as avocados in California and wheat, pork and beef from the Plains states.

The trade ministers who negotiated it predicted the overall economic and political heft of the 12-nation group would turn the accord into a model for future trade agreements.

It would overhaul the system for settling disputes between nations and foreign companies, while barring tobacco companies from using that process to block countries’ antismoking initiatives.

It also would enforce higher standards for labor conditions and environmental protection, including wildlife-trafficking.

How will it benefits to USA ?

Expanding the orbit of U.S. free trade is a major foreign policy goal of the Obama administration, and as a part of its desired international “pivot” toward Asia, it hopes to increase its economic presence in the region.

Supporters of the partnership say by lowering barriers to trade and increasing avenues for economic globalization, the enlarged $2 trillion zone of diminished tariffs would stimulate employment in U.S. and provide an incentive to invest abroad.

Agreement hopes to show China that the U.S. will remain a committed economic partner for the nations of the Pacific Rim, without excessively provoking Beijing.

Who opposes the TPP?

Opposition to the proposed agreement and to the perceived influence of multinational corporations in the process has been led by public health advocates, labor groups and environmentalists and politicians.

Some U.S. legislators have voiced concerns that the TPP requirements would prevent access to medicine in developing countries, due to excessive patent protection. Doctors Without Borders argues against “dangerous provisions that would dismantle public health safeguards enshrined in international law.”

Many activists also focused criticisms on the intellectual property section of the proposed partnership, which, according to WikiLeaks, could have “wide-ranging effects on medicines, publishers, internet services, civil liberties and biological patents.”

As a trade agreement, the TPP would require House and Senate majorities and then the president’s signature. Domestic American opposition has concentrated their skepticism not just on how “free” the agreement would be but also on problems with the “fast track” congressional voting procedure.

Japanese producers in the anime and manga industry say the TPP could damage their business by allowing companies to halt imports of intellectual property, in order to protect local distributors of licensed merchandise.

Rice farmers, as well as beef, poultry and pork producers, have mounted firm resistance to the pact, which would dramatically decrease import tariffs.

Geopolitically, China is concerned that the partnership is designed to exclude its economic activities, while some American officials have expressed doubts whether the market-oriented pact would ever be compatible with Beijing’s command economy.

In Europe, analysts view the TPP as a trade regime that could set a precedent for the nascent Transatlantic Trade and Investment Partnership (TTIP).


 

Published with inputs from Arun

Any doubts?


[op-ed snap] TPP is dead, but its legacy lives on

Context:

  1. One of his first acts of Donald Trump as President was to veto U.S. participation in the Trans-Pacific Partnership (TPP)
  2. TPP is a trade deal among 12 Pacific economies

Opposition to TPP:

  1. A ‘free trade’ deal, the TPP was opposed extensively by progressives for the last two years because of its far-reaching provisions that increased corporate power over trade at the expense of workers and consumers
  2. The agreement’s damaging ambitions were most evident in the proposed provisions concerning intellectual property

Data exclusivity:

  1. The TPP provided explicit protections for ‘biologics’ (drugs manufactured in a living organism, rather than through chemical synthesis), the first trade agreement to do so
  2. More damagingly, the agreement mandated the protection of clinical test data submitted for marketing approvals, with pharmaceutical data obtaining five to eight years of protection
  3. This provision, called ‘data exclusivity’ or ‘marketing exclusivity’, prevents a generic company from relying on the clinical test results of the originator in order to prove the efficacy of its drug
  4. It was justified using the argument that clinical trials are the most expensive part of drug development and hence there is a necessity to provide drug developers the ability to limit access to that data so as to incentivise research

Undermining accessibility:

  1. Data exclusivity is a deeply uncompetitive policy that serves to undermine generic competition in a troubling way
  2. It is possibly a stronger restriction than patent protection itself
  3. Patent protection can be challenged if the product is not sufficiently novel, or violates existing national standards for obtaining patent protection, thereby clearing the way for generic competition (This is, in fact, what happened to Novartis in India over Gleevec, an anti-cancer drug)
  4. Simultaneously, generic companies can, and do innovate around patents and produce chemical entities that have the equivalent efficacy of the original drug
  5. But for the generic version to be able to come to the market, it is essential that it be able to use the proof of efficacy and safety that is generated by the clinical trial
  6. The restriction on the use of test data would therefore require a generic company to undertake clinical trials by itself, which is both unfeasible (in terms of expense) and unethical (since it would expose patients to trial protocols, during which some patients would have to receive a placebo when a proven cure is available)
  7. As a result, in a country like India, even in a situation where there is no patent barrier, data exclusivity would allow for a period of five to eight years during which there is no plausible way that market access could be allowed for generics, thereby reducing access to cheaper medicines for the population

Effects of the move:

  1. The developed world’s ambitions for intellectual property will not die with the agreement
  2. What seems to be likely is that these damaging provisions will simply migrate to other agreements
  3. One of them is the Regional Comprehensive Economic Partnership (RCEP) agreement which involves 16 countries
  4. The demise of the TPP has been characterised by the media as a boost for China’s trade ambitions in the region, while countries negotiating RCEP appear to be buoyed by the notion that it would now be the largest free trade agreement in existence
  5. Courtesy of Japan and South Korea, the RCEP negotiations feature several of the intellectual property provisions of the TPP
  6. This should be of great concern for access to medicines globally, as countries involved in the RCEP negotiations include key generic drug-producing countries, including India

No change in U.S. approach:

  1. S. withdrawal from the TPP may change the U.S.’s approach to trade and intellectual property more in form than in substance, by switching from trade agreements that include several countries to bilateral free trade agreements (FTAs)
  2. In this process, the U.S. is more than likely to continue its vigorous campaign against perceived “violators” of U.S. intellectual property
  3. The pressure exerted by the Obama administration on the public health safeguards in Indian patent law over the past eight years are likely to continue, if not worsen
  4. Despite the public health impact of the TPP’s provisions having gripped public discussion on the agreement, it is unlikely that these concerns will guide U.S. trade or foreign policy

Note4Students:

Make note of the points for a Mains answer. Remember the important terms for Prelims. Read the details on TPP here.

Trump moves to pull U.S. out of TPP

  1. U.S. President Donald Trump moved to pull the United States out of the Trans-Pacific Partnership (TPP), making good on a pledge to scrap a deal he denounced as a “job killer
  2. He called this withdrawal a ‘great thing for the American worker’

Note4students:

TPP is an important trade topic in the world. Keep yourself update with such developments for mains. Know about TPP from prelims PoV, though a question has already been asked in Prelims 2016.

Back2basics:

  1. The TPP is headed by the US and includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam
  2. It would set new terms for trade and business investment among the United States and 11 other Pacific Rim nations
  3. It would phase out thousands of import tariffs as well as other barriers to international trade

Let’s know about Trans-Pacific Partnership?

  1. The TPP is headed by the US and includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
  2. It would set new terms for trade and business investment among the United States and 11 other Pacific Rim nations.
  3. It would phase out thousands of import tariffs as well as other barriers to international trade.
  4. In this regard, the External Affairs Ministry would soon do a study in the context of TPP and inform the government what the priorities should be in terms of policy-making.
  5. In the meantime, the Indian government will have to consider improving the country’s standards in areas such as labour laws by holding stakeholder consultations.

‘Trans-Pacific pact may impact exports’

The TPP agreement (which India is not a part of) was reached in October last year and the member countries have 2 years to ratify the pact.

  1. Commerce Minister Sitharaman has expressed concerns over the mega-regional free trade pact, also called as the Trans-Pacific Partnership (TPP).
  2. The TPP has set very high standards for the international trading regime.
  3. Hence, this pact is likely to indirectly impact India’s exports in several industrial sectors such as textiles, plastics, leather, clothing, cotton and yarn.
  4. Besides it is also expected to affect the country’s regime on investment, labour standards, IPR, possible evergreening of patents.
  5. The investor-State dispute settlement mechanism adopted by the TPP was also a concern from India’s point of view.

Twelve Pacific Rim countries ink TPP agreement

  1. 12 other Pacific Rim countries have signed Trans-Pacific Partnership (TPP) agreement which covers about 40 per cent of the world economy.
  2. The final agreement was signed in Atlanta, US which was under negotiation for five years and was delayed repeatedly by negotiations over drug patents.
  3. It should be noted that China being world’s second-largest economy has been not part of the agreement.
  4. TPP agreement will pave way creation of a new economic bloc with reduced trade barriers between the 12 nations involved.

These 12 countries are: Singapore, Malaysia, Vietnam, Brunei Darussalam, Japan, Canada, United States, Mexico, Peru, Chile, Australia and New Zealand. 

NYT


:( We are working on most probable questions. Do check back this section.







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