NEW DELHI: The impact of US president-elect Donald Trump’s announcement to withdraw from the Trans-Pacific Partnership (TPP) after assuming office in January is being felt in India’s trade pact talks with 15 other countries under the Regional Comprehensive Economic Partnership (RCEP).
The members common to the two agreements (TPP and RCEP), especially developed countries such as Australia, Japan and New Zealand, want talks at the RCEP trade bloc to move ahead full steam, indicating the need to stitch together more agreements before the US, under a Trump administration, pulls out of TPP.
“There were discussions on TPP and some common countries want RCEP to move forward. The developed countries say that it is an opportunity to fast track the talks,” said an official aware of the development on condition of anonymity.
The point was raised in the just concluded round of RCEP talks in Indonesia, the first to take place after Trump’s vowed to pull out of TPP last month.
On November 22, Trump said: “On trade, I am going to issue a notification of intent to withdraw from TPP, a potential disaster for our country. Instead, we will negotiate fair, bilateral trade deals that bring jobs and industry back on to American shores.”
The other countries, according to the official quoted above, haven’t opposed the RCEP’s pace but are waiting for Trump to make a clear statement on the fate of TPP. Trump is scheduled to take over as US president from Barack Obama on 20 January 2017.
RCEP is a proposed free trade agreement between 10 Asean countries besides China, Japan, South Korea, Australia, New Zealand and India.
It aims to cover goods, services, investment, competition, economic and technical cooperation, dispute settlement and intellectual property rights.
“These are external countries with heavy dependence on exports and would certainly show interest in the RCEP. They have a strong export base which helps in their GDP growth,” said TS Vishwanath, principal advisor of APJ-SLG Law Offices.
However, experts feel that with TPP unlikely to move as expected, developed countries have pinned their hopes on RCEP for some preferential treatment and trade concessions. “With Trump’s statements on trade, an anti-trade sentiment was engulfing everyone.
These countries now want to send the message that trade is still important and mega agreements are the new norm, instead of bilateral free trade pacts,” said a Delhi-based expert on trade, who did not want to be named.
The RCEP grouping comprises of over 45% of the world’s population, with a combined GDP of about $21 trillion.