Donald Trump’s decision to walk out of the Trans-Pacific Partnership may not have a direct impact on India, but there could be indirect spin-offs. The pressure on New Delhi to fast-track ongoing free-trade negotiations with countries that were part of the TPP, such as Canada, Australia and New Zealand, is going to increase. The eagerness of members to conclude the Regional Comprehensive Economic Partnership — the ambitious free trade pact that India is negotiating with the 10-member Asean, China, Japan, South Korea, Australia and New Zealand — will also intensify as seven of its 16 members are also part of TPP.

The extent to which India can positively handle the pressure and use the frustration of TPP members from a failed agreement to its advantage would be something to watch out for. Many RCEP members had been putting pressure on India to give its consent to intellectual property rules that go beyond the multilateral TRIPS agreement citing the TPP template as an example. That pressure would now be considerably off and New Delhi can insist on its stand of non-flexibility in the area. New Delhi could also try and convince members of its need to offer lower market opening commitments to countries such as China, Australia and New Zealand with whom it doesn’t have free trade pacts.

Similarly, in its FTA negotiations with Australia and New Zealand, it may now be in a better position to protect sensitive items such as dairy products from cuts. India’s FTA talks with Canada had hit a road block because of the latter’s unhappiness with the provisions on investor-state dispute in India’s draft bilateral investment treaty. With the Trump regime appearing to distance itself from Canada, Ottawa may be in a more accommodating frame of mind.

However, India needs to do its homework well and know exactly what to demand instead of beating about the bush and playing for more time.

Deputy Editor

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