INTRODUCTIONA trade agreement among twelve Pacific Rim countries.Drafted on 5 October 2015.Signed on 4 February 2016 in Auckland, New Zealand.Seven years of negotiations.Not entered yet into force.TPP concern many matters of public policy.

GOALS OF TPP TRANS PACIFIC PARTNERSHIP

STATED GOALS OF TPP

1. Promote economic growth.2. Support the creation and retention of jobs.3. Enhance innovation, productivity and

competitiveness.4. Raise living standards.5. Reduce poverty in our countries. 6. Rnd promote transparency.7. Good governance.8. Enhanced labor and environmental protections.

OTHER GOALS

TPP contains measures to lower trade barriers (tariff barriers majorly).

investor-state dispute settlement mechanism (but states can opt out from tobacco-related measures).

INVESTORS STATE DISPUTE SETTLEMENT (ISDS) an instrument of public international law grants an investor the right to use dispute settlement proceedings against a foreign government. If an investor from one country (the "Home State") invests in another country (the "Host State"), both of which have agreed to ISDS, and the Host State violates the rights granted to the investor under public international law, then that investor may bring the matter before an arbitral tribunal. While ISDS is often associated with international arbitration under the rules of ICSID it in fact often takes place under the auspices of international arbitral tribunals governed by different rules and/or institutions, such as the London Court of International Arbitration, the International Chamber of Commerce, the Hong Kong International Arbitration Centre or the UNCITRAL Arbitration Rules.

MEMBER COUNTRIES1.Australia2.Canada3.Japan4.Malaysia5.Mexico6.Peru7.USA8.VIETNAM9.BRUNEI10.JAPAN11.NEW ZELAND12.SINGAPORE

TPP IN NUTSHELL1.It involves 12 countries: the US, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru.

2.The pact aims to deepen economic ties between these nations, slashing tariffs and fostering trade to boost growth.

3.Member countries are also hoping to foster a closer relationship on economic policies and regulation.

4.The agreement could create a new single market something like that of the EU.

GOODS & SERVICES THAT ARE GOING TO BE AFFECTED? In all, some 18,000 tariffs are affected.

The signatories have said they will either eliminate or reduce tariffs and other restrictive policies from agricultural products and industrial goods.

Tariffs on US manufactured goods and almost all US farm products will go almost immediately once the deal is ratified.

On textiles and clothing, they will be removing all tariffs, but while the US Trade Representative says most tariffs will be removed immediately after the deal is ratified, "tariffs on some sensitive products will be eliminated over longer time frames as agreed by the TPP Parties".

On trade in services, they have agreed that free trade would be quite a good thing, and in some areas, they are going to liberalise trade.

HOW BIG DEAL IS TPP? Pretty big indeed. The 12 countries have a collective population of about 800 million - almost double that of the European Union's single market. The 12-nation would-be bloc is already responsible for 40% of world trade.

The deal is a remarkable achievement given the very different approaches and standards within the member countries, including environmental protection, workers' rights and regulatory coherence - not to mention the special protections that some countries have for certain industries

BENEFITS TO USA TRANS PACIFIC PARTNERSHIP

BENEFITS TO USAwill help increase Made-in-America exports, grow the American economy, support well-paying American jobs, and strengthen the American middle class. TPP will make it easier for American entrepreneurs, farmers, and small business owners to sell Made-In-America products abroad by eliminating more than 18,000 taxes & other trade barriers on American products across the 11 other countries in the TPP—barriers that put American products at an unfair disadvantage today.

BENEFITS TO USA

The rules of the road are up for grabs in Asia. If we don't pass this agreement and write those rules, competitors will set weak rules of the road, threatening American jobs and workers while undermining U.S. leadership in Asia.

BENEFITS TO VIETNAM TRANS PACIFIC

PARTNERSHIP

BENEFITS TO VIETNAMVietnam is poised to be TPP’s biggest winner.Vietnam’s growing production and export of apparel and footwear,resulting from the phase out of high duties in TPP partner countries, especially the United States.High-standard TPP—along with Vietnam’s new trade agreement with the European Union will also require Vietnam to make and adhere to major structural adjustments.

BENEFITS TO VIETNAMParticipating countries have also found that the benefits of implementing comprehensive FTAs are significant and go well beyond the obvious advantages of eliminating duties on a country’s primary exports.

High-standard FTAs can also promote foreign investment, technological advancement, innovation, broader participation in trade, and other key developments that together with additional reforms can drive stronger and more broadly shared economic development.

BENEFITS TO CANADA TRANS PACIFIC

PARTNERSHIP

BENEFITS TO CANADA Trade losses to member nations due to higher tariffs.

Canadian export products would be on a level playing field with all members and at an advantage to nations outside of the TPP.

overall more exports from Canada to TPP members.

added advantage of more and cheaper imports to Canada from these same TPP members.

BENEFITS TO MALAYSIA TRANS PACIFIC

PARTNERSHIP

BENEFITS TO MALAYSIA It will allow Malaysia to join a partnership of economies and receive beneficial terms and leverage when negotiating for trade.

Many other key sectors would also supposedly benefit from various favourable terms, including a reduction in duty of up to 93%.

Signing the TPPA may make Malaysia a more attractive location for investments, and with nations such as the USA, Japan and Singapore in the TPPA, there is a greater potential to attract investors from those economies.

BENEFITS TO AUSTRALIA TRANS PACIFIC

PARTNERSHIP

BENEFITS TO AUSTRALIA

BENEFITS TO JAPAN TRANS PACIFIC PARTNERSHIP

BENEFITS TO JAPANstrategic and intangible benefitsJapan also profits concretely from the TPP.regulations over foreign companies entering markets have been relaxed, and this will make it easier for Japanese companies to expand overseas into new opportunities.the auto industry will benefit from a phase-in in the reduction of tariffs on their exports.the lowering of tariffs on farm, dairy, and other goods will help lower the costs of these items to Japanese consumers.the completion of the TPP will give Japan leverage to quickly conclude trade agreements with other countries.

BENEFITS TO MEXICO TRANS PACIFIC

PARTNERSHIP

BENEFITS TO MEXICOAs a founding member, Mexico has veto rights over future potential members.Currently, 67% (US$574 bn) of Mexico’s commerce and 53% (US$228 bn) of Mexico’s FDI is within NAFTA.Commerce with countries included in the TPP other than those in NAFTA (USA and Canada) add an additional 5% (US$40 bn) in commerce and 2% (US$14 bn) in FDI for Mexico.According to current figures, 72% of Mexico’s commerce (US$574 bn) and 55% (US$225 bn) of FDI is within the TPP. Most of it linked to the USA.

BENEFITS TO SINGAPORE TRANS PACIFIC

PARTNERSHIP

BENEFITS TO SINGAPORE Exporters will benefit from the removal of duties on more types of goods than previous trade agreements provided for.

Singapore could be an indirect beneficiary of increased trade between other TPP nations.

Singapore companies which provide services such as shipping and trade financing "could benefit from increased trade between the big players".

BENEFITS TO PERU TRANS PACIFIC PARTNERSHIP

BENEFITS OF PERU

Ease the entry of Peruvian products into the bloc’s member countries and improve access granted through existing trade agreements.

BENEFITS TO BRUNEI

DARUSSALAMTRANS PACIFIC PARTNERSHIP

BENEFITS TO BRUNEI DARUSSALAM One of the largest gainers among the Trans Pacific Partnership (TPP) member countries.

Brunei would experience a 5.9 per cent income growth from baseline income by 2030.

Benefit from lower tariffs and non-tariff measures in large export markets and at home from stronger positions in regional supply chains through deeper integration

BENEFITS TO NEW ZELAND TRANS PACIFIC

PARTNERSHIP

BENEFITS TO NEW ZELANDTPP will give New Zealand better access to globally significant markets.It will diversify New Zealand's trade and investment relationships, and provide a platform to build on the NZ$28 billion of New Zealand goods and services exported to TPP countries in 2014.TPP will help support that by setting a new standard for trade and investment in the Asia Pacific region, generating substantial long-term economic and strategic benefits for New Zealand.It provides a platform for wider, regional economic integration, and supports the foundation for a free trade agreement of the Asia Pacific. This gives New Zealand the opportunity to shape future trade liberalisation in the Asia Pacific region and promote the growth of regional supply chains.

PROS & CONS OF TPP & OBSTACLES

TO TPPTRANS PACIFIC PARTNERSHIP

PROS OF TPP Boosts exports and economic growth, creating more jobs and prosperity for the 12 countries involved.

increases exports by $305 billion per year by 2025. U.S. exports would increase by $123.5 billion, focusing on machinery, especially electrical, autos, plastics and agriculture industries.

removing 18,000 tariffs placed on U.S. exports to the other countries.

United States has already withdrawn 80% of these tariffs on foreign imports.

TPP evens the playing field.

PROS OF TPP The agreement adds $223 billion a year to incomes of workers in all the countries, with $77 billion of that going to U.S. workers.

All countries agreed to cut down on wildlife trafficking, especially elephants, rhinoceroses, and marine species. It prevents environmental abuses, such as unsustainable logging and fishing. Those that don't will face trade penalties.

CONS OF TPP

Will contribute to income inequality in high-wage countries by promoting cheaper goods from low-wage countries.

Higher-paid owners of the intellectual property would receive more of the income gains.

the trade agreement could supersede financial regulations.

Authoritative Power of Investors State Dispute Settlement (ISDS)

OBSTACLES FOR TPP The United States agreed to shorter patents, especially for biologic drugs. Pharmaceutical companies can keep their formulas secret for five to seven years instead of 12 years.

All stated-owned enterprises must comply with global trade standards that protect their workers and the environment. The United States had to overcome objections from Vietnam, Singapore, and Malaysia. Those countries must now allow labor unions or face penalties.

The United States, Japan, and Canada will lose some tariff protection for dairy, beef and poultry producers.

These countries also agreed to open up their automotive industries. That could cost local jobs while lowering the price of cars and trucks.

The United States won the battle over the Investor-State Dispute Settlement Mechanism. That gives foreign companies more rights to sue the government than their domestic companies have. In return, the U.S. agreed to restrictions on the trade of tobacco. Cigarette companies will no longer be allowed to use arbitration panels to sue countries that tax or otherwise restrict cigarette advertising.

EFFECTS OF TPP TRANS PACIFIC PARTNERSHIP

EFFECTS OF TPP By 2030, the TPP will generate an annual income gain of $492 billion for the world.

Percentage gains are especially large for Vietnam and Malaysia, where the agreement should also stimulate domestic reforms and provide access to protected foreign markets.

significant percentage gains are projected for the smaller economies of Brunei, Peru, Singapore and New Zealand.

EFFECTS OF TPP negatively affect non-members divert trade from nonmembers to members Losses are tangible for China, India and Thailand, which compete with TPP members for TPP markets, and for Korea.

Some nonmembers, including the E.U. and Hong Kong, experience net gains, in part because of the assumption that TPP provisions liberalize some trade with nonmembers.

additional integration in the Asia-Pacific region and beyond, with larger attendant gains.

EFFECTS OF TPP It is potentially a pathway to the Free Trade Area of the Asia-Pacific (FTAAP), which could include all APEC members.

The Transatlantic Trade and Investment Partnership, in negotiation since 2013, would also have large effects.

The TPP reflects the high ambitions of the major countries in rule-making.

INDIA & TPP TRANS PACIFIC PARTNERSHIP

EFFECT OF TPP ON INDIA India's exports are going to be impacted when the TPP is in place as there would be significant diversion in trade and foreign investments from the Indian market.

A large portion of India's exports are in services. With the anticipated reduction in barriers to trade in services among TPP members, there is the possibility that some of India's services exports to those countries will be replaced by services trade with the TPP member countries.

EFFECT OF TPP ON INDIA The TPP would set a precedent to high global standards and in the event of India's failure to mature and revitalize its manufacturing industry, and induce efficiency in its export sector, it would be increasingly difficult for India to be able to export even if it's a part of RCEP.

India is going to lose the preferential access to the US market which is a big market for Indian exports.

With the TPP in place, Indian industries are likely to face trade diversion effects in some of the key sectors such as textiles and clothing industries.

EFFECT OF TPP ON INDIA Indian exports will be adversely impacted more due to the non-tariff measures rather than tariff measures as the tariff measures are already low in larger markets such as the US and EU. In addition to labour and environmental regulations, intellectual property rights (IPR) protection is a significant component to the TPP negotiations. The IPR standards are much more demanding than those of WTO. There is expectation of significant foreign investment diversion from India and since, a large proportion of India's exports are in services, the impact would be significant.

A BIG QUESTION TRANS PACIFIC PARTNERSHIP

SHOULD INDIA BE A PART OF TPP?

NO

REASON

TPP would set a precedent to high global standards & commitments. Even though TPP is open for new members, the standards set by TPP are too high for India to join.India may not be able to meet many of the commitments for instance the supply chain management or regulatory coherence among others.

WHAT STRATEGY INDIA IS PERSUING TO TACKLE TPP?

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.

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.

India also needs to resume stalled negotiations with the EU.

WHAT STRATEGY INDIA IS PERSUING TO TACKLE TPP?

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.

NEAR FUTURE OF TPP TRANS PACIFIC

PARTNERSHIP

WHAT HAPPENS NEXT? The text of the agreement will have to be signed and then ratified by all 12 signatories. Details of how the deal will be implemented will be argued out in individual countries' legislatures.

In the US, it comes before Congress in the midst of a presidential election year, which is likely to turn it into a major political football within both parties.

However, Congress has granted President Obama "fast-track" authority over the deal, which only allows lawmakers to either reject it or ratify it.