ternal e tor in ndia 15.21
Need of Shift: The environment for global trade way, India should proactively pursue to
policy has probably undergone a paradigm shift in revive WTO and multilateralism.
the aftermath of Brexit and the US elections. The
Brexit was motivated by protectionist sentiments trans-Pacific PartnershiP
in the UK. Similar sentiments are being signalled
by the new US government, too. This may lead to The TPP (Trans-Pacific Partnership) is a new
sharp appreciation in the US dollar—it has already mega-regional agreement. The 12 Pacific Rim
appreciated 5.3 per cent during November- nations (Australia, Brunei, Canada, Chile,
December 2016, settling at 3.1 per cent higher Japan, Malaysia, Mexico, New Zealand, Peru,
by January 2017 (against an index of partner Singapore, the US and Vietnam) signed the TPP
currencies). During the most protectionist phase agreement on 5 October 2015. It is likely to set
of the USA (mid to late 1980s) a sharp rise was higher standards for goods and services trade and
seen in the dollar—caused by tighter monetary is considered a mega regional FTA which can be
policy and relaxing fiscal policy. a pioneer in many ways and is likely to be a game-
changer for the world economy and global trade.
A vacuum is being created in international
trade leadership under the possible resurgence of The block accounts for around 40 per
protectionist pressures. In such a scenario needs to cent of global GDP and around 60 per cent of
promote open markets and tap domestic growth. merchandise trade. In terms of economic size,
Similar moves are needed from the emerging it is larger than the existing NAFTA (North
market economies (EMEs), too. In this way, for America Free Trade Area). The agreement is very
India two specific opportunities21 arise: comprehensive and not only encompasses the
scope of tariff-eliminating mega regional trade
(i) India could get much benefits by
pacts, but also aims at—
promoting labour-intensive exports
and negotiating free trade agreements (i) setting higher global standards for
with the UK and Europe. The potential international trade through lower
gains for export and employment are benchmarks for non-tariff barriers;
substantial—additional export of US$ 3 (ii) more stringent labour and environment
billion (specially in the apparel and leather regulation;
and footwear sectors) and additional (iii) higher IPRs (intellectual property rights)
employment of 1.5 lakhs. protection;
(ii) The likely retreat of USA from regional (iv) greater transparency in government
initiatives such as the Trans-Pacific procurement and limiting advantages to
Partnership (TPP) in Asia and the state-owned enterprises (SoEs);
Trans-Atlantic Trade and Investment (v) transparency in health care technology,
Partnership (TTIP) with the EU, it is competitiveness and supply chain.
possible that the relevance of the WTO (vi) it also includes new and emerging trade
might increase. As a major stakeholder issues and cross-cutting concerns such
and given the geo-political shifts under as internet and digital economy and
21. Economic Survey 2016-17, Government of India, participation of state-owned enterprises
Ministry of Finance, N. Delhi, Vol. 1, pp. 25-26. (SoEs) in global trade and investment.