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.