Trans Pacific Partnership: Latest updates and developments

11 Trade ministers reach deal on Pacific trade without US


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Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: TPP, NAFTA, APEC

Mains level: TPP deal and its effects on India and world


News

TPP deal finalized after the US exit

  1. Trade ministers from 11 Pacific Rim countries said they reached a deal to proceed with the free-trade Trans-Pacific Partnership deal
  2. An accord was reached on “core elements” of the 11-member pact
  3. The deal was in doubt after US President Donald Trump abandoned it

US pullout

  1. In January this year, Mr. Trump pulled out of the deal
  2. Leaders of the 11 countries remaining in the TPP had been due to meet and endorse a deal
  3. The TPP member countries are trying to find a way forward without the U.S., the biggest economy

What is the USA’s stand now?

  1. The U.S. president lambasted the World Trade Organization and other trade forums as unfair to the United States and reiterated his preference for bilateral trade deals
  2. He said that he would not enter into large trade agreements, alluding to U.S. involvement in the North American Free Trade Agreement and the TPP

China supporting Free Trade

  1. Chinese President Xi Jinping said that nations need to stay committed to economic openness or risk being left behind
  2. He urged support for the “multilateral trading regime” and progress toward a free-trade zone in the Asia-Pacific
  3. China is not part of the TPP

Impact of Open Trade

  1. Open trade has an unequal impact on workers
  2. There are also concerns over automation in manufacturing that could leave many millions in a wide array of industries with no work to do

APEC summit

  1. All this is going on on the sidelines of APEC summit being hosted in Vietnam
  2. APEC operates by consensus and customarily issues non-binding statements
  3. APEC’s members are Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Philippines, Russia, Singapore, Taiwan, Thailand, the U.S, and Vietnam

Back2Basics

Trans Pacific Partnership

  1. The Trans-Pacific Partnership (TPP), or the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), is a trade agreement between Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States (until 23 January 2017) and Vietnam
  2. The TPP began as an expansion of the Trans-Pacific Strategic Economic Partnership Agreement (TPSEP or P4) signed by Brunei Darussalam, Chile, New Zealand, and Singapore in 2005
  3. The TPP contains measures to lower both non-tariff and tariff barriers to trade and establish an investor-state dispute settlement (ISDS) mechanism
  4. The agreement will enter into force after ratification by all signatories if this occurs within two years
  5. APEC members may accede to the TPP, as may any other jurisdiction to which existing TPP members agree. After an application for membership is received, a commission of parties to the treaty negotiates conditions for accession

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