1. Column: Unavoidable implications

Column: Unavoidable implications

India's FTP must deal with mega regional trade pacts. Else, we will be isolated from a large chunk of global trade

By: | Updated: June 30, 2015 12:25 AM

Earlier this month, the US Senate voted in favour of the fast-track Trade Promotion Authority (TPA), enabling president Barack Obama to formalise the Trans Pacific Partnership (TPP). The twelve countries negotiating the TPP can now finish the remaining negotiations and commence the agreement. The possibility of the TPP seeing the light of the day by late 2016/early 2017 is a distinct possibility.

With around two-fifth of the world output and a quarter of global trade, the TPP will be a game-changer for the world economy. Its impact will manifest variously across the world. India, while not being a member of the TPP, will nonetheless experience some of its effects.

An immediate impact will be tariff preference erosion. The TPP is expected to eliminate tariffs on almost all goods traded by its members. These wide-ranging tariff withdrawals will affect export prospects of those countries that currently enjoy zero or preferential duties in TPP member markets. India, for example, is a beneficiary of the US GSP (Generalized System of Preferences) scheme offering duty-free access to almost 5,000 exports from developing countries. These advantages would be nullified with non-developing country TPP members such as Japan and Brunei also getting duty-free access for same exports. In what could be an even more damaging impact, TPP members would get duty-free access to the US market for several non-GSP exports that would continue to attract duties for India and other developing countries.

India’s tariff preference concerns are not limited to the US market. Among the TPP members —Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam—India has preferential market access to several countries other than the US. It has comprehensive economic cooperation agreements covering trade in goods, services and investments with Japan, Malaysia and Singapore. It also has goods FTAs with Chile and Peru. It obtains preferential access in domestic markets of Brunei and Vietnam through India’s goods FTA with the ASEAN. Considerable chunks of these preferential accesses would be neutralised post-TPP. Given that India’s existing agreements with most TPP members are rather narrow with large negative lists of products exempt from tariff cuts on either side, many Indian exports ineligible for duty-free access in TPP member markets under its existing agreements would be pitted against zero-duty access for same products in the latter markets.

The degree of preference erosion for Indian exports would depend on how high the tariffs are on Indian exports vis-à-vis zero, or near-zero tariffs for same exports from TPP members. For some exports, the applied tariffs would be low in those TPP markets that as it is have low base tariffs (e.g. Australia, Canada, Chile, Japan, Singapore, and USA) and would imply limited preference erosion. Furthermore, some upcoming agreements that India is negotiating bilaterally with TPP members like Australia and Canada can secure its exports new preferential access. It is important for India to conclude these agreements at the earliest. Similar beneficial effects can also come from quick conclusion of negotiations on the RCEP (Regional Comprehensive Economic Partnership). The RCEP is being negotiated by the ten-member ASEAN group along with Australia, China, India, Japan, New Zealand and South Korea. It has several members common with the TPP (e.g. Australia, Brunei, Japan, Malaysia, New Zealand, Singapore and Vietnam).

More than tariff preference erosion, India’s bigger concern with the TPP should be from the standards that the agreement will institutionalise in member economies and markets. Primary among these are standards for assuring safety and health of plants, animals, humans and the environment. Most TPP countries are sensitive about these standards and stringent on their satisfaction. Exports to TPP markets will need to comply with these non-negotiable standards. The challenge for non-TPP exporters like India would be to continuously upgrade the quality of their products in line with the TPP market standards. There would be two major problems in this regard. With quality standards for most products in the US and many other TPP members getting determined by private industry, obtaining knowledge on their evolution would be difficult for non-TPP exporters. An even bigger problem would be developing domestic certification capacities for ensuring higher standards in exports.

In addition to new and higher quality benchmarks, the TPP would be establishing new standards in several areas connected to trade in goods, services and investments. These would manifest through common regulations in TPP members for major domestic services like finance, telecommunication and e-commerce enabling seamless trade; uniform rules for government procurement; standardized competition policies; higher standards for protecting intellectual property and proprietary knowledge; common rules for settling disputes between investors and member governments; and new regulations for management of labour and environment. The TPP is expected to be the ‘standard-setter’ in world trade for most of these areas. Other mega-agreements like the TTIP (Transatlantic Trade and Investment Partnership) and Pacific Alliance are expected to adopt many of these standards. These standards are already getting reflected in bilateral agreements TPP members are signing with other countries such as the Australia-China and the Canada-EU agreements.

India’s Foreign Trade Policy (FTP 2015-2020) notes the emergence of mega-RTAs like the TPP and some of their likely implications. But it does not spell out a long-term policy for handling TPP and other mega-RTAs. Having such a policy requires India to be prepared to contribute to global trade rule-making outside the WTO. India has hardly been prepared to do so given its discomfort with the issues negotiated in the WTO-plus space. Unless it does so objectively, the TPP might mark the beginning of India’s isolation from a significant part of global trade.

The author is senior research fellow, Institute of South Asian Studies (ISAS), National University of Singapore. e-mail: isasap@nus.edu.sg. Views are personal

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    David H.
    Jun 30, 2015 at 3:29 pm
    ECONOMIC LAW; There is only a Finite Amount of Global Value; it does Not Grow, or, Shrink, it just moves around. And, the TPP & Global Treaties/’Arrangements’ just Funnel it to Global Corporate Signatories & Shareholders. YOUR Accelerating ‘AUSTERITY’ is Absolutely NECESSARY in order to Pay Corporate Leaders/ocs. & Shareholders Their PENALTIES of Treaties’/Arrangements’ Tribunals. Come ON! Just ‘PATRIOTICALLY’ (Supplicantly) SUPPORT YOUR NATIONAL ‘RULING CL’ & their ocs. How long before an & other TPP Signatories hear, ‘Well, you should have known…’; Pres. G.H. Bush said re; Corporate America ‘Arranged’ Reneging on NAFTA ‘dispute resolution’? Unethically More Profitable for Globalized ‘U.S.’ Corporations to Pay Lobbyists & Not Pay Taxes than to Pay Patriotic, Taxpaying American Workers & Accounting/BANKING SERVICE Industries. Scrutinizing TPP & Global Treaties/’Arrangements see; the ACLU/NAACP re; ‘The Submission’: ‘The SHAREHOLDERS & Corporations of AMERICA, Australia, Canada, the nations of the Trans Pacific, the EU, et al v the harmless Canadian NON shareholders, both; Native & non Native, et al’ including ‘The MERKEL (Chancellor of Germany) Letter; To Sue, or, Be Sued?’ Secrecy 4 – 5 years after Ratification for Wall St. to Muddy the Insider Trading & ‘IPO’ Trails; the lil’ Trader, Pension Funds, Public, et al, Don’t Stand a Chance. *** FULL Article, see; davidehsmith.wordpress
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    1. D
      David H.
      Jun 30, 2015 at 3:27 pm
      ECONOMIC LAW; There is only a Finite Amount of Value in the World; it does Not Grow, or, Shrink, it just moves around. And, the TPP & Global Treaties/’Arrangements’ just Funnel it to Global Corporate Signatories & Shareholders. YOUR Accelerating ‘AUSTERITY’ is Absolutely NECESSARY in order to Pay Corporate Leaders/ocs. & Shareholders Their PENALTIES of Treaties’/Arrangements’ Tribunals. Come ON! Just ‘PATRIOTICALLY’ (Supplicantly) SUPPORT YOUR NATIONAL ‘RULING CL’ & their ocs. How long before an & other TPP Signatories hear, ‘Well, you should have known…’; Pres. G.H. Bush said re; Corporate America ‘Arranged’ Reneging on NAFTA ‘dispute resolution’? Unethically More Profitable for Globalized ‘U.S.’ Corporations to Pay Lobbyists & Not Pay Taxes than to Pay Patriotic, Taxpaying American Workers & Accounting/BANKING SERVICE Industries. Scrutinizing TPP & Global Treaties/’Arrangements see; the ACLU/NAACP re; ‘The Submission’: ‘The SHAREHOLDERS & Corporations of AMERICA, Australia, Canada, the nations of the Trans Pacific, the EU, et al v the harmless Canadian NON shareholders, both; Native & non Native, et al’ including ‘The MERKEL (Chancellor of Germany) Letter; To Sue, or, Be Sued?’ Secrecy 4 – 5 years after Ratification for Wall St. to Muddy the Insider Trading & ‘IPO’ Trails; the lil’ Trader, Pension Funds, Public, et al, Don’t Stand a Chance. Fast Tracking TPP & Global Treaties. part of corp. US's attempt to Increase & ‘Share’ $17 Trillion Debt 'Earning$' & to Legitimize Hidden Earning$ in Untouchable Foreign Banks. Time to REPATRIATE 'Earnings'; NO FOREIGN Accountants, Banks, Services, etc. NO Trickle Down from Hiding ‘Earnings’ in Secret Off-S Accounts. Priority Taxpayer Payouts to TPP Secret Tribunals & Military Industrial Complex Leaves Much Less for Health Care, Investigating/REGULATING Global Corporate Abuses & Gov’t. Programs. As the ‘U.S.’ has No Intention of Paying ‘it’s’ 17 trillion Debt, or, ’it’s’ Treaty Expandable Debt, why not just Cut the Taxes of the lil’ Guy in Half? Congress Just Needed a lil’ 'Bun Buttering' with Taxpayer$ & ‘Considerations’ from those Companies ‘Willing’ to Pay to P TPP; Global Treaties/'Arrangements’ Done Deal for Secret Pre-Paid ‘Considerations’. TPP & Global Treaties/'Arrangements’; U.S. has made the Same Mistake that ‘Canada’ is Continuing to Make. Corporate Canada’s (Harper’s) Deliberate With-Holding Key Info from Treaty Partners Could Start Global Economic Meltdown with No Remorse for Misleading other Treaty Signatories. What do you think is a good criteria for ascertaining the health & robustness of an un-secret treaty? How will ‘The Criteria’ limit the Abuses of the Secret Treaties for the Taxpayers? What are the various different ways that we can All prevent The Secrecy Abuse, whether it be Human Rights Abuses like The Residential Schools, or, Civil Rights Abuses like the ‘foreign’, /or, ‘domestic’ treaties? If Not 'Treason', then, there are very compelling arguments for concluding that the corporations, whether they be, foreign, domestic, &/or, a blend, that do not respect the 'lesser' jurisdictions, ie. individual states, provinces, territories, or, munilities, are not good corporate citizens of the host countries & thus, can be treated as 'persona non grata'. Should Congressmen & Parliamentarians Have to Sully Their ‘Beliefs’ & s Pitches with ‘Sordid’ Facts that Come from Actually Reading & Understanding Global Treaties/’Arrangements’ Just the Facts; ‘We’, The People can Draw our Own Conclusions? 2 Republican Senators Admit that They Have read the TPP. Zero Canadian Admissions. Congress/Parliaments; Deluded, or, Deluding; 'IGNORAMUS et IGNORABIMUS' (I do not know & I will Not Know)? ‘Quis custodiet ipsos custodies’? (Who Will Guard the Guards?) Corporations Cut Costs & Dramatically Increase flat Profits by Not Suing each Other & by Suing the Little Guy (via ‘your’ Gov’t.) who is ‘Guilty’ even Prior to Tribunals & All of the Time. Teaching the Gordon Gekkos’ of Wall St., Congress, et al, some Humility & Integrity via Quantification? Global Treaties/’Arrangements’ with their Secret ‘Death-Star-Chamber’ Tribunals that The Global (non BRICS) Corporate Economy is in the Process of Secretly Ping will Finally Legitimize its Ability to secretly move money around, ie. ‘launder’ without Fear of Legal/government Regulation; ie. It’s the Global Corporate Economy’s Own Jurisdiction & they Insist that you Pay for it & Not them. What is Governors’/ Premieres’ Rationale for not Defending Taxpayers; Provinces/States Colluding with Feds? Corporate America’s Last Chance to Legitimize their Fleecing the Little, harmless Guy (95% - 99% of U.S.) Before Tanking the Global (non BRICS) Economy? Exploitable ‘Vulnerabilities’, s & Back Doors to Close. Can ‘your’ Federal Reps Willingly Answer ‘your’ Questions below If They haven’t Read the TPP & other Global Treaties Don’t Forget to Demand Your Money Back for ‘Supplementing’ Fed Rep’s Wages & Future Considerations at Incompetency (‘I didn’t know.) Tribunals. How many ‘Preferred’ Shares are You Selling Your Right to Sue The Global Corporate Economy for? Global Treaties Not about How Much Trade, but, How to ‘Vichy’ Profits & Who to Trade with to 'Undermine' AIIB. Shifting Costs to harmless Non Shareholders to Inflate ‘Profits & Dividends’. Is it Time to Cool off the 'Stockbrokers' again; Buy Gold? TPP & Global Corporate Treaties/’Arrangements more about Tort ‘Abolishment’ than Tort ‘Reform’? Not ‘good corporate citizens’ of the host countries respecting existing ‘lesser’ jurisdictions, then 'persona non grata'. Making the leaders of TPP, Shareholders, et al, 'Persona non Grata'; Shareholders' Meetings I.D. Toxic Neighbors, In-laws, et al? Treaty Signatories Unwittingly Liable for W.A.D. Accord Compensation? Global Corporate Leaders (G-7) may have similar ‘Difficulties’ Dealing with Corporate Canada’s Pariah Prime Minister Harper as Pope Francis has ‘Difficulties’ Apologizing to the PM Harper for Residential Schools’ Abuses while PM Continues to Blame & Punish Those Who He Has Been Deliberately Depriving of the Info? Signatories Beware. TPP (& Global Treaties/'Arrangements’) Secrecy More, Or, Less than Canadian ‘Cultural Genocide’ Secrecy & ‘les Autres’ Abuses? As Pres. G.H. Bush said re; the NAFTA ‘dispute resolution’; ‘Well, you should have known…’. But, If Not PUTIN; 'The WHITE KNIGHT', then Who Do YOU Want to Bankroll the Saving of the harmless NON shareholders of the World from Fast Tracking TPP's, CETA's (TTIP) Secret 'Death-Star-Chamber' Tribunal Penalties? Will Iran, China, the Muslim World, et al, Support Putin in Suits? How about Warren Buffett, &/or, the 'coveted' Hong Kong investor, et al? *** FULL Article, see; davidehsmith.wordpress *** Also see; ‘The MERKEL (Chancellor of Germany) Letter; To Sue, or Be Sued?’ (davidehsmith.wordpress) *** Please consider sharing the enclosed information & questions with 10 friends who will share it with 10 others...
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