Trans-Pacific Partnership:An in-depth analysis

What is TPP:

Tans-Pacific Partnership(TPP) is seems to be the largest trade agreement ,a model for global commerce and workers standards that will include 12 Pacific Rim nations and will account for 40% of world economy.

Background:

• The TPP is an expansion of  Trans-Pacific Strategic Economic Partnership Agreement (TPSEP or P4) formed in 2005.
• Founding countries of TPSEP:Brunei,Chile,Singapore,New Zealand.
• Other participating countries which joined later and converted the TPSEP to TPP are: USA, Canada ,Japan, Malaysia, Mexico, Peru, Australia, Vietnam.

TPP has been concluded with objectives:

• To promote economic growth
• Support the creation and retention of jobs
• Enhance innovation ,competitiveness and productivity
• Reduce poverty and raise living standards
• Promote transparency, good governance and enhanced labour and environmental protections.
• To lower trade barriers, establish an investor-state dispute settlement mechanism.

TPP’s Post-mortem:

• TPP seeks to frame a new global agenda for global trade, requiring countries to go beyond their commitment under WTO and TRIPS(Trade Related Aspects of IPR).
• TPP is a recognition of increasing importance by world powers(like Obama administration)of Asian century in terms of trade as well as strategically.
• With elimination or reduction of almost 1800 tariff and non-tariff barriers TPP have a potential to enhance world’s GDP in larger numbers(as the group constitutes 40% of world’s GDP).
• Many claims that TPP is a well framed answer of Obama administration’s ‘pivot policy’ to Chinese initiative(AIIB) and RCEP(where China is a key player).
• In this globalised economy with increasing trade among TPP countries new jobs will be created and growth will be enhanced which will be beneficial to  developing countries like Peru, Vietnam.
• It would also be helpful for USA to establish their hegemony in Asia-Pacific where China have considerable influence(as trade is almost never been about trade, it has always been about geopolitics).

India and TPP: India has been complacent about the TPP. Even various scholars are of the view that its affects on India’s trade will be relatively small. But this is half baked argument as TPP has multi-dimensional effects.

• TPP is an institution and in today’s dynamic world institution serve the interest of power and India's absence in this institution might impact its geo-political and geo-strategic interest.
• Further TPP will set rules and regulation of trade. So regulatory harmonisation will provide advantage to those country which follow the rules of this large trade bloc and provide competitive advantage to investors.
• India has a big potential in pharmaceuticals(like generic medicine) and as a largest trade partner, China have been reluctant towards Indian pharma. So any possible presence in TPP will provide diversity to India’s pharma trade and innovation.
• In this development phase where India is consistently pursuing for investment(Make in India) and trade agreement ,induction in TPP will facilitate credit worthiness of India and improve investor’s confidence.
• In this globalised world ,presence in any large multilateral platform will increase interconnectedness which is very essential for country’s overall foreign policy. And presence in this Asia-pacific trade bloc will be helpful in pursuing ‘Look East, Act East’ policy.

Criticism of TPP:

• The secrecy with which these negotiations are concluded raise the questions over the democratic legitimacy.
• Some say that the economic gains of TPP are not as dynamic as its proponent suggest and it would enhance the power of corporations against that of states.
• Critics are of the view that though TPP has objective to reduce poverty and raise living standards but it would create income inequality as it will be beneficial only to large companies(especially to American companies).
• Health advocacy groups say it would reduce access to generic medicines in developing countries.
• TPP "could directly threaten our climate and our environment(owing to new rights that would be given to corporations)and new constraints on the fossil fuel industry all have a huge impact on our climate, water, and land”.
• Many claim that TPP has provisions for IPR(Intellectual Property Rights) law harmonisation(w.r.t USA IPR laws),resulting into discrimination and cases of ever-greening of patents as many IPR laws in USA are for protection of business class interests.

Need of Hour:

TPP is well applauded engagement among Asia-Pacific countries as it will enhance connectedness and would provide congenial room to reduce any possible conflict among them. So it is essential that transparent procedure should be followed, any kind of hegemonic intervention(by USA) should be avoided and rules should be set as per global standard. For India it is essential that foreign policy formulators should discuss and recognise the potential of TPP and try for observer status as immediate step.