TPP, RCEP should forge agreements for better trade balance: Industry
Deepak Kumar | The Dollar Business
Expressing concern over the impact of the Trans-Pacific Partnership (TPP) agreement on India’s exports, an industry body has said that the TPP and the Regional Comprehensive Economic Partnership (RCEP) should evolve into complimentary agreements to ensure trade balance in the Asia-Pacific region. “The TPP accord will dismantle trade barriers, reduce transaction costs, promote ease of doing business and possibly benefit consumers with lower prices and more choice in member countries,” ASSOCHAM said in a communication addressed to Finance Minister Arun Jaitley and Commerce Minister Nirmala Sitharaman. The industry body said the TPP bloc is likely to establish trade rules that could further put “burden of compliance on India’s manufacturing and services standards for access to the markets of the participating countries”. In 2014-15, India’s total trade with TPP countries stood at $219 billion – exports worth $79 billion (26% of country’s total exports) and imports worth $140 billion (31% of country’s total imports) – which accounted for about 29% of the country’s global trade. Trade potential in the TPP bloc is huge as it accounts for over 40% of the global trade. Despite India’s overall exports growth dipping by over 1% during 2014-15, its shipment to TPP markets grew by 4%. ASSOCHAM said that India may lose exports to the TPP-associated economies as preference will be given to the member nations. Since tariff will be eliminated, multinational corporations (MNCs) would choose to shift their production in the TPP member countries. Analysts believe that the implementation of the TPP framework will hit India’s key industries, leading to a huge decline in the country’s exports. An exporters’ body has asked the government to come up with comprehensive plans to revive India’s outbound shipment. “TPP would affect all the industries; manufacturing and small & medium enterprises (SMEs) in particular. India should push for FTAs (free trade agreements) regulation with member as well as non-member countries. The government needs to come up with fast scale schemes to push exports,” S C Ralhan, President of the Federation of Indian Export Organisations (FIEO), told The Dollar Business. Indonesia has announced that it will join the 12-member TPP trade bloc which includes the US, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam as its member. “Though the RCEP also aims to expand liberalisation commitments contained in existing ASEAN-plus one free trade agreements (FTAs), it is less ambitious regarding depth of reforms, allows far more exemptions for sensitive products and for broad development considerations, and provides more consultative rather than binding dispute resolution procedures,” said the ASSOCHAM.
October 27, 2015 | 4:19pm IST.