Two major economies in the region - China and South Korea - are not part of the TPP. They might join later. It has America, Canada, Australia, New Zealand and Japan from the bigger economies, and Chile, Peru, Mexico, Vietnam, Singapore, Brunei and Malaysia from the smaller ones.
It will come into effect only after each of these ratifies the agreement. Details of how the deal will be implemented will be argued out in individual countries in the coming weeks and months before being ratified. Those in favour say it will unleash new economic growth among the countries involved. Those against, particularly some Americans, fear it could mean jobs will move from the US to developing countries.
(T N C Rajagopalan - http://www.business-standard.com/)
The TPP reflects the high ambitions of the major countries in rule-making. Barack Obama, the US President, said "When more than 95 per cent of our potential customers live outside our borders, we can't let countries like China write the rules of the global economy. We should write those rules, opening new markets to American products, while setting high standards for protecting workers and preserving our environment."
With tariff reduction no more a major challenge, the major tasks for the TPP are rule harmonisation, achieving coherence and removal of non-tariff barriers.
The TPP and other mega trade agreements under negotiation such as the Transatlantic Trade and Investment Partnership and the Regional Comprehensive Economic Partnership (RCEP) are bound to challenge India's businesses in many ways, says our commerce ministry. First, they will erode existing preferences for Indian products in established traditional markets such as the US and the European Union (EU), benefiting the partners to these agreements. Second, they are likely to develop a rules architecture which will place greater burden of compliance on India's manufacturing and services standards for access to the markets of the participating countries.
Our commerce ministry says these challenges should be treated as an opportunity to respond strategically, and to persuade Indian industry to rise to the challenge of higher standards in both products and services, and the framework of rules. Besides, India wants to find its own way into the global supply chains and markets via the RCEP, a proposed free trade agreement between the 10-members of the Association of Southeast Asian Nations plus Australia, China, India, Japan, South Korea and New Zealand. Parties to these negotiations are engaged in serious discussion and expect to hammer out an agreement by end-2015. India also needs to resume stalled negotiations with the EU.
The ministry has begun the process of sensitising domestic business to the new global realities and challenges posed by these mega trade deals, with a view to muster support for its negotiations in RCEP and with the EU. Indian businesses must recognise that the essence of such negotiations is give and take.