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Trans Pacific Partnership (TPP)

We live in a time when seemingly endless collections of new groups of states, constituting a veritable alphabet soup, compete for our attention. Which are the ones that are important, and how might they reshape global trade, investment and other economic flows, to say nothing of political relationships?

The newest one is the Trans Pacific Partnership, or TPP. In mid-November 2011 at Bali, participating for the first time in the 16-member East Asia Summit (EAS), U.S. President Barack Obama gained global attention with his sponsorship of the new ‘Trans Pacific Partnership,’ an initiative which will carve out a new economic cluster of states that would stretch from Asia to North and South America. This is in addition to the EAS, itself a newish grouping begun in 2005 and comprising the 10 ASEAN nations plus Australia, China, India, Japan, New Zealand and South Korea and this year, the US and Russia.

TPP emerged in 2005, sponsored by Singapore as a ‘small seed’, drawing together four rather small countries – Brunei, Chile, New Zealand and Singapore – as a ‘Strategic Economic Partnership.’ The aim was to build closer economic ties in a manner that is as yet undefined. The initiative indirectly connects with Asia Pacific Economic Cooperation (APEC), a cluster of some 21 ‘member economies’ of the Asia Pacific region (including ‘Chinese Taipei’), that have joined hands to create trade and other economic partnerships.

At the East Asia Summit this year, Australia, Malaysia, Peru, the US and Vietnam announced that they would join TPP. Others, like Canada, Japan and Mexico are watching from the sidelines, to see where this initiative leads. Now with US sponsorship, TPP seems to ‘have taken a life of its own,’ as David Pilling noted in the Financial Times on Nov. 8.

Certainly, TPP has the potential to become a powerful economic bloc, with the US on board and if these countries can persuade others to join.

One set of Western observers estimate that it aims at a much more comprehensive free trade agreement (FTA) amongst themselves, which might cover domestic policy issues that FTAs normally do not address, such as government procurement, rules governing the functioning of state enterprises, as also intellectual property, labor and environment standards. Many would surely view that with unease; countries such as Japan do not share the US perspective on such matters. China views TPP as aimed against itself.

As for India – it has been interested in APEC membership, but nothing has moved forward on that front for some years. As it stands, TPP is unlikely to interest India, because of its intrusion in domestic policy. India had fought at the World Trade Organization to keep out some of these same new standards intruding into trade agreements.  For the moment, however, it will be wise for India to pay close attention to a further evolution of TPP.

Ambassador Kishan S. Rana has served as India’s ambassador to several countries, including Germany; he is professor emeritus with DiploFoundation (Geneva & Malta), and author of six books on diplomacy and inter-cultural issues.

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