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India's exclusion from mega trade pacts is worrisome: Eco Suvey

Survey underlines imminent dangers of India not being party to the mega trade agreements

BS Reporter  |  New Delhi 

Sluggish growth in manufacturing as well as services exports, coupled with India’s exclusion from the mega regional trade pacts the and are negotiating with other Asian economies, will adversely impact the Indian economy, slowing export buoyancy even further, according to the

“Trade outcomes have been stagnating. The trading environment is becoming more challenging as the buoyancy of Indian exports has declined with respect to world growth and as the negotiation of mega-regional trading arrangements threatens to exclude India,” the Survey, tabled in Parliament on Friday, said.
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For the first time, the underlined the imminent dangers of India not being party to the mega trade agreements — Trans-Pacific Partnership (TPP) and Trans-Atlantic Trade and Investment Partnership (TTIP).
 

“In the context of the slowdown in both world growth and India’s export buoyancy, any possible exclusion from the mega-regionals would be additionally worrisome,” the Survey stated.

The is a free trade agreement being discussed between the and the European Union and is in final stages of negotiations.  On the other hand, is negotiated among the US, Canada, Japan, Australia, Singapore, Vietnam, Brunei, Malaysia, Mexico, Chile, and Peru.

Beside tariff liberalisation, both these agreements are expected to usher in higher level of standards with stricter intellectual property provisions in global trade, much beyond the benchmark set by the World Trade Organization.

“There will not only be the standard diversion emanating from Indian exporters having to face higher tariffs in large, growing markets, but increasingly they will have to contend with different and higher product and sustainable development standards, placing them at an even greater disadvantage,” it said.

Although India is party to yet another ambitious proposed trade pact such as the Regional Comprehensive Economic Partnership, it might prove to be too beneficial for the exporters because the overall standards in this agreement will be much weaker compared to and

The has also hinted towards a possibility of India joining the in the future if the country has to integrate with global value chains by way of greater tariff liberalisation under the current free trade agreements (FTA).

As a result, the Survey suggested “significant upgrading of Indian trade capability” if ever the country wants to participate in the mega trade pacts. This is because these large and diverse trade pacts will not only seek drastic tariff liberalisation and setting of higher standard, it will also have provisions that will be much ahead of the reforms India is undertaking at present.

UPGRADING TRADE CAPABILITY
  • Trans-Atlantic Trade and Investment Partnership is a free trade pact being discussed between the and the European Union and is in final stages of negotiations
  • Trans-Pacific Partnership is negotiated among the US, Canada, Japan, Australia, Singapore, Vietnam, Brunei, Malaysia, Mexico, Chile, and Peru
  • Besides tariff liberalisation, both these agreements are expected to usher in higher level of standards with stricter intellectual property provisions in global trade

First Published: Sat, February 28 2015. 00:49 IST
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