TPP and India: Lessons for Future Gains


Content from the Brookings Institution India Center is now archived. After seven years of an impactful partnership, as of September 11, 2020, Brookings India is now the Centre for Social and Economic Progress, an independent public policy institution based in India.

Until 2015, the Trans Pacific Partnership (TPP) was seen as a game-changer in the evolving international trade regulatory regime. It was evident, as expressed by India’s Foreign Trade Policy 2015-2020, that it would not be possible for the country to accept the emerging agreement. The future of TPP is now uncertain, with the US, the largest economy in the TPP, withdrawing from the agreement. This is of some relief to India because the TPP would have eroded India’s access to certain key international markets. The present situation, however, gives more than just relief: it creates several important opportunities for India. The text of the TPP agreement provides a template for potentially helping India with its domestic policy reform, its regional or multilateral collaborative initiatives (e.g. for regulatory coherence), and even with some ideas to mitigate the concerns arising in trade negotiations at the regional or WTO level.

Of particular interest could be, for instance, the good governance principles agreed under TPP, i.e. transparency of procedures and regulations, timely decision, processes to facilitate transactions, standards of review, and support to improve institutional capabilities. The TPP also establishes collaborative and consultative mechanisms amongst different countries, and identifies policies that are used to improve cost-effectiveness and efficiency of domestic production and trade. For regulatory regimes, the template includes provisions relating to the regime in general, as well as for certain specific product areas. Further, in view of the rapid evolution of international trade conditions, it would also be worthwhile to consider both the platform for discussion established by TPP, as well as the specific areas and mechanisms identified for its Committees to address emerging concerns and new issues.

India’s concern with trade negotiations is largely with respect to tariff negotiations. In the case of TPP, the large tariff decline agreed under the negotiations would be impossible for India to accept. In this context, it is interesting that the TPP agreement also provides examples of a number of flexibilities to protect domestic industries if required, subject to specified conditions. Further, the extent of flexibility could be augmented by considering the various types of solutions agreed under TPP, ranging from soft disciplines (such as guidelines or best-effort agreement), to much more legally binding disciplines underlying the large tariff reduction by member counties. These possibilities could be examined to provide possible models or starting point for seeking flexibilities that may lead to mutually acceptable solutions in trade negotiations for areas which otherwise would be a serious concern for India.