Pacific oceans’ 11

Pacific oceans’ 11

Context

• The US abandoned the 12-nation Trans-Pacific Partnership (TPP) following the Paris accord and Iran nuclear deal have raised suspicions about American commitment to well-negotiated treaties

What led to the formation of the CPTPP?

• The United States solely contributed 60% of the combined Gross Domestic Product of the 12 members of the TPP.
• Ten months on, trade ministers from the remaining 11 nations agreed in Danang in principle to a new pact, the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP)
• It revised some of the features of the TPP.
• The pact however requires domestic ratification, which is expected to be complete by 2019.

What is the implication of the US exclusion?

• The countries recognise that multilateral free trade, contrary to any misgivings, is beneficial in the long run.
• The TPP in its current form has significant protections for labour and environment and is in this regard an advance over other free trade agreements.
• The U.S.’s self-exclusion reflects a failure on the part of the Trump administration as the benefits are not as significant in comparison to its losses
• Can this step effect the World’s perception of the US?
• The pact without the U.S. can be interpreted as a step that diminishes American power and the international order
• Mr. Trump’s decision to pull out of the Paris climate accord and his repudiation of the Iran nuclear deal have raised suspicions about American commitment

How can this benefit India?

• The ASEAN-plus-six Regional Comprehensive Economic Partnership (RCEP) could benefit from complementarities with the CPTPP.
• India must utilise this opportunity to win concessions on services trade liberalisation as part of the plan.