Trans-pacific pact could hurt India

Trans-pacific pact could hurt India

Context

If India were to join the mega-regional Free Trade Agreement (FTA) called the Trans-Pacific Partnership (TPP) and adopt its norms, they would severely hurt the country’s agriculture, manufacturing, services and the generic pharma industry, according to a new book

Book

Titled “Trans-Pacific Partnership Agreement: A framework for future trade rules?” the book — co-edited by Abhijit Das, Professor and Head, Centre for WTO Studies (CWS), Indian Institute of Foreign Trade (IIFT) and Shailja Singh, Legal Consultant, CWS — has done an analysis of the almost the 5,544 pages of the TPP text

Backdrop

U.S. has withdrawn from the TPP. The other 11 countries (Japan, Australia, Canada, New Zealand, Singapore, Malaysia, Brunei, Mexico, Peru, Chile and Vietnam) that were part of the agreement are now expected to ink an amended version in March

Impact of TPP on India

According to the book, if India were to conform to the TPP rules on market access in goods,

• Impact on manufacturing sector: It would pose severe challenges to India’s manufacturing sector. The domestic industry may not be able to face import competition in a duty-free regime, it added
• On the agriculture front, the farmers will be continuously exposed to the risk of being knocked out of the market by cheap and subsidized exports, particularly from the U.S., Australia and New Zealand
• The TPP template may pose severe challenges to the government in regulating services in the future, the book claimed
• Impact on Pharma: Ms. Singh said the TPP also “would severely restrict the entry into the market, or the reimbursement for use, of generic medicine. If India were to adopt [TPP] rules, it would require significant changes in the domestic regulatory regime…” She added India’s export prospects in government procurement markets may continue to below, if it entered the pact.