Current Affairs Classes Pre cum Mains 2025, Batch Starts: 11th September 2024 Click Here for more information
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.
