The United States and 11 other countries on Monday reached a landmark deal on the Trans-Pacific Partnership (TPP), which aims to create the world's largest free-trade zone, linking 40 per cent of the global economy in the Asia-Pacific region.
A trade partnership comprising the 12 countries - Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US, and Vietnam - would have implications on India's foreign trade. (See: New Trans-Pacific trade deal could transform global economy)
TPP, according to US trade negotiators, is designed to help create opportunities for Americans by opening these markets to US goods and services, setting high-standard trade rules, and addressing 21st century issues in the global economy.
US President Barack Obama, however, is facing growing political opposition, including from his party colleagues, trade and labour unions and businesses saying that the deal would prove more disastrous for American jobs and its economy than NAFTA.
"What I have seen so far, the TPP agreement will benefit Wall Street banks and multinational corporations on the backs of hard-working Americans, and it will increase existing threats to our environment," Obama's colleague Congresswoman Tulsi Gabbard said in a statement expressing her opposition.
"This deal, which will affect 40 per cent of our global economy, will be even more unenforceable and more disastrous for American jobs and our economy than NAFTA has already proven to be," she said.
"We are disappointed that our negotiators rushed to conclude the TPP in Atlanta, given all the concerns that have been raised by American stakeholders and members of Congress," said AFL-CIO president Richard Trumka.
In a statement, Coalition for a Prosperous America said there is nothing novel about this TPP agreement. It does not embrace the principles that livestock producers, manufacturers and workers have suggested.
The TPP, an ambitious idea pushed hard by President Barack Obama's administration, would address the "21st century trade issues" such as intellectual property protections, digital trade rights and protections for investors. The deal would have implications on India's foreign trade as it would break down tariffs on thousands of goods and establish uniform rules of commerce, they say.
"This partnership levels the playing field for our farmers, ranchers, and manufacturers by eliminating more than 18,000 taxes that various countries put on our products," Obama said in a statement.
A joint statement released by the trade ministers of these 12 countries said in addition to "liberalising trade and investment between us, the agreement addresses the challenges our stakeholders face in the 21st century, while taking into account the diversity of our levels of development."
"We expect this historic agreement to promote economic growth, support higher-paying jobs; enhance innovation, productivity and competitiveness; raise living standards, reduce poverty in our countries; and to promote transparency, good governance, and strong labour and environmental protections," the statement said.
To formalise the outcomes of the agreement, negotiators will, however, continue the technical work to prepare a complete text for public release, it said. TPP talks began in 2008.
In a recent report, India's Rise: Toward Trade-Led Growth, C Fred Bergsten at the Peterson Institute for International Economics argued that if India joined the TPP it could expand its exports by more than $500 billion an year.
Last month, commerce minister Nirmala Sitharaman refuted that India is being left out. "If you're looking at India being left out. That's not really true," she said when asked about India not being part of the TPP. "We are engaged in Arsep (Asean Regional Comprehensive Economic Partnership), consisting of Asean and Asean FTA countries. We are moving faster along with other members," Sitharaman said.