The signing of the Trans-Pacific Partnership by 12 Pacific Rim nations last week is not a good development for India. The TPP, likely to come into force in two years, will cut tariffs, improve market access and standardise labour, environmental laws and intellectual property protection among its 12 signatories: the US, Canada, New Zealand, Japan, Vietnam, Malaysia, Brunei, Chile, Mexico, Peru and Singapore.
They account for 36 per cent of the global economy, minus China, the world’s second largest economy. It was felt the TPP was the key plank of US President Barack Obama’s ‘pivot’ to Asia, with Chinese domination seen as a threat to US interests. Indian exports, already in the dumps, will be hit further. Minister of state for commerce Nirmala Sitharaman has said this pact will affect India’s exports, while some compare the situation to 1991, when foreign exchange reserves had dwindled so much that India could barely finance three weeks’ imports.
But the good news is that as India is part of the Asean-India Free Trade Area, there’s a lot of overlap as many TPP members are part of the Asean bloc. There have also been protests by organisations within the TPP bloc against the agreement, including in the US, where medium and small industries see it as benefiting big multinationals. India will have to wait and watch on how this situation eventually pans out.
