US, 11 others agree on largest regional free-trade pact

By: | Published: October 6, 2015 12:25 AM

The US and 11 other countries today reached a landmark deal on the Trans-Pacific Partnership, which aims to become the world's largest free-trade zone linking 40 per cent...

barack obama twitterBarack Obama said the TPP includes the strongest commitments on labour and the environment of any trade pact in history, and those commitments are enforceable, unlike the past agreements. (AP)

The US and 11 other countries today reached a landmark deal on the Trans-Pacific Partnership, which aims to become the world’s largest free-trade zone linking 40 per cent of the global economy and would also have implications on India’s foreign trade.

The TPP, an ambitious idea pushed hard by President Barack Obama’s administration, would address the “21st century trade issues” such as intellectual property protections, digital trade rights and protections for investors.

Billed as a historic agreement by Obama, TPP links 40 per cent of the global economy, according to US experts.

The deal would have implications on India’s foreign trade as it would break down tariffs on thousands of goods and establish uniform rules of commerce, they say.

“This partnership levels the playing field for our farmers, ranchers, and manufacturers by eliminating more than 18,000 taxes that various countries put on our products,” Obama said in a statement after the 12 countries — Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US, and Vietnam — released a joint statement following the agreement in the US city of Atlanta.

The joint statement released by the trade ministers of these 12 countries said in addition to “liberalising trade and investment between us, the agreement addresses the challenges our stakeholders face in the 21st century, while taking into account the diversity of our levels of development.”

“We expect this historic agreement to promote economic growth, support higher-paying jobs; enhance innovation, productivity and competitiveness; raise living standards, reduce poverty in our countries; and to promote transparency, good governance, and strong labour and environmental protections,” the statement said.

To formalize the outcomes of the agreement, negotiators will however continue the technical work to prepare a complete text for public release, it said. TPP talks began in 2008.

In a recent report “India’s Rise: Toward Trade-Led Growth,” C Fred Bergsten at the Peterson Institute for International Economics argued that if India joined the TPP it could expand its exports by more than USD 500 billion an year.

Last month, Commerce Minister Nirmala Sitharaman refuted that India is being left out.

“If you’re looking at India being left out. That’s not really true,” she said in Washington when asked about India not being part of the TPP.

“We are very actively engaged in ARSEP (Asean Regional Comprehensive Economic Partnership) which consists of ASEAN and ASEAN FTA countries. So we actually in ARSEP are moving faster along with other members,” Sitharaman had said.

Obama said the TPP includes the strongest commitments on labour and the environment of any trade pact in history, and those commitments are enforceable, unlike the past agreements.

“It promotes a free and open Internet,” Obama said.

“It strengthens our strategic relationships with our partners and allies in a region that will be vital to the 21st century. It’s an agreement that puts American workers first and will help middle-class families get ahead,” he said.

The TPP eliminates or reduces tariff and non-tariff barriers across substantially all trade in goods and services and covers the full spectrum of trade so as to create new opportunities and benefits businesses, workers, and consumers.

It facilitates production and supply chains, and seamless trade, enhancing efficiency and supporting the goal of creating and supporting jobs, raising living standards and enhancing conservation efforts.

It includes new elements that seek to ensure economies at all levels of development and businesses of all sizes can benefit from trade.

TPP also includes specific commitments on development and trade capacity building, to ensure that all Parties are able to meet the commitments in the Agreement and take full advantage of its benefits.

It is intended as a platform for regional economic integration and designed to include additional economies across the Asia-Pacific region.

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