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  • The Trans-Pacific Partnership - Discuss its implications for India

    ANS: In the backdrop of a somewhat passive WTO the world is heading towards from regional trade groups to mega~regional trade groups. TPP is a recently signed group of 12 countries producing almost 40% of world trade. The group is described by many as tool innovated by USA to define trade rules by means of trade which seems not possible through a forum and sidelining China in the same.

    Implications of the TPP on india:

    *India will have to improve their capacities both for developing policies and the capabilities of their producers to upgrade standards in line with the higher requirements

    * Food security issues

    * India pharma and other sectors could take a hit.

    * We are not capable of accepting rules of the TPP such as on intellectual property rights.

    *The group being a mega one would hit our exports as the members of the group would have zero duty market access within the group. Also india has put off talks with EU on BTIA. All this can prove as a matter of concern for us when the world as a whole is facing economic slowdown.

    *It as has effected the bargaining position of india in bilateral agreements.


    In conclusion the the formation of TPP has brought about new challenges to india.
  • With the failure of Doha Round of WTO negotiations (still inconclusive), multilateralism has moved to regional blocks, with TPP as a prime example.

    TPP stands for Trans pacific partnership, and is a multilateral FTA consisting of 12 pacific rim countries, and spearheaded by US.

    With 21st century being touted as the Asian century, US has moved quickly in order to consolidate its position in Asian markets, and use TPP as an extension to its Asia pivot policy.

    This has necessarily major implications for India.

    #Economic implications:

    -- Will give India access to unexplored markets, an urgent requirement for Make in India.
    -- India will have to comply with US's IPR regime. Our IPR is trips compliant, but US wants stricter IPR regulations.
    -- pacific rim countries and specifically US and Canada, can be a viable destination for our surplus and cheap labour.
    -- India will also stand to gain from technology transfer under TPP.
    -- Foreign exchange boost, but India will have to watch out for dumping of cheap products in Indian markets, which could harm our domestic producers.

    #Strategic Implications:

    -- India has virtually zero standing in South and East China sea, mainly due to Chinese pressures. TPP can provide a reasonable explanation for India to gain foothold in these regions.

    -- Since trade in TPP is to be carried out in open seas, maritime security would have to be strengthened. India can Play a vital role in this. But entrenched fears might lead to militarisation of seas.

    # RCEP vs TPP

    RCEP is also a regional FTA, spearheaded by China. It has ASEAN+6 focus, and lax rules. Being an Asian superpower, both of these multilateral FTAs can only be successful if it can elicit participation of India. And hence Indian foreign policy makers can use the pretext of joining RCEP, to convince US to agree to its terms (ipr, pharma, anti-dumping).

    This could potentially increase our bargaining power.

    Na mai padheya, Na mai likheya
    Par mai duniya, toh badha sikheya
  • @sunnykumar ji, I have mentioned Rcep in my answer. You can use this point too in your answer. Rest of your answer is perfect.
    Na mai padheya, Na mai likheya
    Par mai duniya, toh badha sikheya
  • @sunnykumar ji, I have mentioned Rcep in my answer. You can use this point too in your answer. Rest of your answer is perfect.
    Thanks @RasAlGhul ji for the review......Would keep RCEP in mind.....May be i have written well but urs seem more structured and readable
  • @RasAlGhul If you allow me to say a few things about your answers here..Please don't take this negatively. You write great answers otherwise.

    According to me, if you look at TPP as rightly pointed out by @sunnykumar , it throws more challenges than opportunities for India. If you are only supplementing the points put by sunny then some of your points make real good sense. However, if your answer is self-contained then I think you missed the crux which is that TPP makes Indian exports less competitive and throws a major challenge to India (TPP comprising of 40% of global trade). Further, I think your points are well taken if India were a member of TPP - all of that would have accrued to India had it been a member. I don't think TPP will give India the option of trading labours to Canada and India, neither I think it will offer any technology transfer to India or it will make India present in South China sea. So you may take my points into consideration if you find them useful.

    I think a complete answer should cover both positive and negative aspects. Here is a humble attempt:

    In the backdrop of a weakened WTO driven multilateralism, TPP, a 12 country mega regional block is yet another move in the trend towards regional multilateralism - TTIP, RCEP being other examples. With over 40% of global trade, TPP is potentially the most powerful trade bloc, which can favourable mould trade relations with other countries.

    The implications for India are discussed below:

    Trade implications

    (i) Indian exports are bound to become uncompetitive due to 40% market held between the TPP members. Therefore, India must align itself to multilateralism and rigorously participate in such initiatives. Well designed BTAs are also important.
    (ii) India must have to upgrade standards and technologies to meet the requirements of trade in this mega-group.
    (iii) With the current IPR regime certain sectors, most of all - pharma exports will be hit, as the TPP implements stringent IPR norms, spearheaded by the US.
    (iv) However, TPP also offers India a mega '12 markets consolidated into one' comprising of uniform rules and thus easier to deal with.

    Geo-political implications

    (i) With large economies aligning themselves to trade blocs like TPP, India stands to lose its economic leverage and thus strategic standing in global affairs.
    (ii) Different large blocs may create a tendency of alignments leading to potential polarisation of geo-political relations as well, creating another conundrum for India.
  • @Nestor ji, sahi pakda aapne. I did not feel good while writing the answer, and had an inkling that someone would point out how shoddy my answer is, sooner or later.

    I don't want to make excuses, but being a first timer and having prelims score in the speculated cutoff range, I feel completely destabilised. This frustration has crept into my prep lately, and am unable to do justice to my work.

    A few points about my answer :

    -- The answer is incomplete, it only analyses a select few dimensions. I wrote this answer just after I woke up, and had read sunny ji's answer prior to that, so maybe subconsciously I was adding to it.

    -- I believe I read about labour movement potential in tpp somewhere, I cannot recall where. I think there is a potential that tpp nations could tap India for cheap labour.

    -- USA/Canada or for that matter any developed country would not share its technology very easily. Here India can utilise the 'Threat' of joining Rcep, to make US submit to its demands. Indian policy makers have declared the inclination of joining Rcep already, so its down to US to make tpp conditions favourable for India.

    -- South China sea presence for India was my own invention. I know its not gonna happen. Cant recall why I wrote it.

    *i would like to delete my answer, as it might mislead someone, but there is no option for that.

    I promise to give a better attempt at my answers next time (and I hope I clear my head soon.)

    Thanks for the review nestor ji once again.
    Na mai padheya, Na mai likheya
    Par mai duniya, toh badha sikheya
  • @RasAlGhul You are really very good with your answers and cover all the points very very well. Even if u are a first timer, you write like a very experienced player.. well nuanced answers. You will rock the exams don't worry! :-bd
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