The Trans-Pacific Partnership (TPP) impact on India and South Asia will be much more than the short-term tariff-preference erosions for the region's exports, a senior researcher at Singapore's Institute of South Asian Studies (ISAS) says.
"The effects are likely to include the challenges of upgrading to new quality standards of the TPP markets and developing long-term strategies for negotiating 'new' issues in trade governance," observed Amitendu Palit, a Senior Research Fellow and Research Lead for Trade and Economic Policy at the ISAS, a think tank at the National University of Singapore (NUS).
"India's Foreign Trade Policy (2015-2020), while noting the advent and some of the implications of the TPP, does not spell out any clear strategies for addressing these. But it is essential for India to do so," he wrote in a research paper on "Trans-Pacific Partnership, India and South Asia".
Otherwise, Indian exports will face increasingly adverse prospects in the TPP markets, as well as in the markets of countries that are negotiating other mega-Regional Trade Agreements (RTAs), like the European Union, Palit points out.
A lack of strategic vision for mega-RTAs like the TPP can gradually isolate India and South Asia from a significant part of the global trade space, he warns.
With much of world trade beginning to fix comparative advantages of national producers on satisfaction of high quality standards and domestic institutional reforms in their countries across a wide range of cross-cutting "World Trade Organization plus" issues, India must look closely at the global trade agenda set by the TPP for staying relevant in world trade, he says.
The TPP will be a game-changer for the world economy and global trade, introducing new rules and systems.
With its 12 members - Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam accounting for around two-fifths of the world output and a quarter of global trade - the TPP's rules and writ will cover large chunks of the world economy and trade.
Many of the same rules might also be implemented under other mega-RTAs that are being currently negotiated, as well as under new bilateral trade agreements, says Dr Palit based on his research.
The TPP has implications for several countries including India and others from South Asia. Given that several TPP member-economies are major trade partners of South Asian countries, these impacts would have both short-term and long-term implications, spread over time, he says.
The TPP is expected to make around 11,000 tariff lines duty-free for its members. This wide-ranging tariff elimination will affect the competitiveness of these exports from countries that currently enjoy duty-free access in the TPP member-markets.