Trans Pacific Partnership: Latest updates and developments

Mar, 10, 2018

[op-ed snap] Trade goes on: Trans-Pacific Partnership

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Note4students

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

From UPSC perspective, the following things are important:

Prelims level: Particulars of the CPTPP

Mains level: Particulars of the CPTPP and, related concerns for the member countries and future members.


News

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership(CPTPP)

  1. Recently, 11 Asia-Pacific countries, including Japan, Australia and Canada, has signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership in Chile
  2. The CPTPP is, in effect, the original Trans-Pacific Partnership(without the USA) struck during the Barack Obama presidency

Low tariffs in the Member countries of the CPTPP

  1. The countries signing the agreement have agreed to bring down tariffs on cross-border trade by as much as 98% after domestic ratification
  2. The countries account for more than 13% of the world economy
  3. More countries are expected to sign the CPTPP in the future, and there is hope that a post-Trump U.S. may join the bloc

Criticism of the CPTPP

  1. The CPTPP, as it looks to expand influence by adding other countries into its fold, will need to address other problems as well
  2. One of the points of criticism of the TPP was the alleged influence of special interests in dictating its broad framework
  3. The TPP text, which has in large part been incorporated into the new deal, had also been flayed for mandating labour and other regulations that increase the bureaucratic burden on businesses
  4. Many have cited the size of the agreement to contend that the benefits from tariff reductions may be cancelled out by the massive increase in regulatory requirements

Will other countries join the CPTPP?

  1. While there may be no hard and fast rule to gauge the net benefit of the agreement, addressing these concerns will only strengthen the chances of more countries joining it
  2. A simpler trade agreement can also help the cause of transparency and lower the chances of lobbying by special interests in the future
Nov, 11, 2017

11 Trade ministers reach deal on Pacific trade without US

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Note4students

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
Feb, 03, 2016

‘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.
Oct, 07, 2015

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. 

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