Dr. Biswajit Dhar Professor Centre for Economic Studies and Planning Jawaharlal Nehru University New Delhi
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1 Dr. Biswajit Dhar Professor Centre for Economic Studies and Planning Jawaharlal Nehru University New Delhi
2 The Global Trading Regime Complex combination of bilateral, regional and multilateral arrangements Now gets even more complicated with the coming of the mega-regionals Trans Pacific Partnership (TPP) Regional Comprehensive Economic Partnership (RCEP) Transatlantic Trade and Investment Partnership (TTIP) FTAAP (Free Trade Area of Asia Pacific)??
3 Bilateral Trade Agreements Involving Asia-Pacific Countries 58 agreements currently in operation in which at least one country from the Asia-Pacific region is involved Most of these countries are currently either negotiating or exploring the feasibility, of several FTAs India is currently negotiating bilateral FTAs with the EU, Australia, New Zealand and Canada, while at the same tme exploring the possibilities of such agreements with countries in the Gulf region and Africa
4 Disentangling the Noodles in the Bowl India China Indonesia Malaysia Philippines Viet Nam ASEAN - India ASEAN - China ASEAN - ANZ ASEAN - ANZ ASEAN - ANZ ASEAN - ANZ APTA APTA ASEAN - China ASEAN - China ASEAN - China ASEAN - China APTA - Accession of China APTA - Accession of China ASEAN - India ASEAN - India ASEAN - India ASEAN - India Chile - India Chile - China ASEAN - Japan ASEAN - Japan ASEAN - Japan ASEAN - Japan GSTP China - Costa Rica ASEAN - Korea ASEAN - Korea ASEAN -Korea ASEAN - Korea India - Afghanistan China - Hong Kong, China AFTA AFTA AFTA AFTA India - Bhutan China - Macao, China GSTP Chile - Malaysia GSTP Chile - Viet Nam India - Japan China - New Zealand Japan - Indonesia GSTP Japan - Philippines GSTP India - Malaysia China - Singapore India - Malaysia PTN Japan - Viet Nam India - Nepal Iceland - China Japan - Malaysia India - Singapore Pakistan - China Malaysia - Australia India - Sri Lanka Peru - China New Zealand - Malaysia India - Korea Switzerland - China Pakistan - Malaysia MERCOSUR - India SAFTA SAPTA Global System of Trade Preferences among Developing Countries (GSTP); Asia Pacific Trade Agreement (APTA); Asia Pacific Trade Agreement (APTA) - Accession of China; South Asian Free Trade Arrangement (SAFTA); South Asian Preferential Trade Arrangement (SAPTA); ASEAN Free Trade Area (AFTA); Protocol on Trade Negotiations (PTN)
5 Disentangling the Noodles in the Bowl Fiji Bangladesh Nepal Thailand Korea EU - Papua New APTA India - Nepal ASEAN - ANZ ASEAN - Korea Guinea / Fiji MSG APTA - Accession of China SAFTA ASEAN - China APTA PICTA GSTP SAPTA ASEAN - India APTA - Accession of China SPARTECA PTN ASEAN - Japan Canada - Korea SAFTA ASEAN - Korea EFTA - Korea SAFTA AFTA EU - Korea GSTP GSTP Japan - Thailand Korea - Australia Lao - Thailand Korea - Chile Thailand - Australia Korea - India Thailand - New Zealand Korea - Singapore Korea - Turkey Korea - US Peru - Korea PTN Global System of Trade Preferences among Developing Countries (GSTP); Asia Pacific Trade Agreement (APTA) - Accession of China;; ASEAN Free Trade Area (AFTA); South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA); Pacific Island Countries Trade Agreement (PICTA); Melanesian Spearhead Group (MSG); Protocol on Trade Negotiations (PTN);
6 How Engaged are the Asia-Pacific Countries FTA Partners in FTAs? Agreements India 14 China 12 Korea 10 Jap an 7 M alaysia 7 ASEAN 6 Thailand 5 Singap ore 4 Viet Nam 3 Nep al 2 Indonesia 2 Laos 2 Philip p ines 2 Fiji 1 Bangladesh 1
7 Nature of Economic Integration Realised through these Bilateral/Regional FTAs Levels of trade liberalisation ambitions have varied widely across countries Aggressive liberalisers Japan, Korea, Singapore and Malaysia... And now Viet Nam and Brunei Darussalam as members of TPP Conservative liberalisers India and Indonesia Would the RCEP remove these categories?
8 Regional Comprehensive Economic Partnership (RCEP) Launched at the 19th ASEAN Summit in Bali to deepen the level of cooperation between ASEAN and the 6 countries (China, Japan, Korea, Australia, New Zealand and India) that are the grouping s FTA partners Agglomeration of ASEAN+1 FTAs In 2013, RCEP members countries accounted for nearly 30% of the world s GDP and trade, and nearly 50% of the world s population 10 th Round of negotiations was held in October 2015 in Busan The initial deadline for closing the negotiations (end-2015) will be missed no definite time-line has yet been suggested
9 Areas covered in the RCEP negotiations Liberalisation of goods and services Investment, intellectual property rights, competition Economic and technical cooperation, for Narrowing development gaps Maximizing mutual benefits... Building upon existing economic cooperation arrangements between ASEAN and ASEAN s FTA partners participating in the RCEP
10 Two Contrasting Pathways for the RCEP Seven of the 16 countries in TPP (Japan, Australia, New Zealand, Malaysia, Singapore, Brunei and Viet Nam) are members of the TPP Would these countries bring the TPP dynamics in RCEP? RCEP builds on the mandate given to pursue Economic and technical cooperation, an unique occurrence for any contemporary regional integration arrangement, and strengthens it as a development pillar
11 RCEP = Asian Economic Community? Development pillar of RCEP resonates well with the objectives of the ASEAN Economic Community (AEC) The East Asia Summit process provides the political support for the formation of the Asian Economic Community Over the past few years, sustained efforts have been made to improve the connectivity (physical/virtual) within the East Asian Region, and to thus bring the countries in the region closer These critical regional public goods can provide sustenance to the economics of neighbourhood Funding support can come from the Asian Infrastructure Investment Bank (AIIB)
12 Trans Pacific Partnership (TPP) Who does the TPP Benefit? Most developed countries are claiming massive increases in trade and growth No such claim from the developing countries, thus far An independent assessment of the TPP is urgently needed, with the active participation of all relevant stakeholders Can the Trade Unions take this initiative?
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15 USTR Claims Massive Benefits for the United States TPP eliminates over 18,000 taxes that various countries impose on Madein-America exports, providing unprecedented access to vital new markets in the Asia-Pacific region for U.S. workers, businesses, farmers, and ranchers TPP eliminates import taxes on every Made-in-America manufactured product that the U.S. exports to TPP countries TPP cuts import taxes on Made-in-America agricultural exports to TPP countries. Key tax cuts in the agreement will help American farmers and ranchers by expanding their exports, which provide roughly 20 percent of all farm income in the United States TPP puts American workers first by establishing the highest labor standards of any trade agreement in history, requiring all countries to meet core, enforceable labor standards as stated in the International Labor Organization s (ILO) Declaration on Fundamental Principles and Rights at Work TPP will result in the largest expansion of fully-enforceable labour rights in history, by bringing hundreds of millions of additional people under ILO standards levelling the playing field for American workers so that they can win in the global economy
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17 Objectives of TTIP A comprehensive agreement that addresses a broad range of bilateral trade and investment issues, including regulatory issues, and contributes to the development of global rules Key areas Market Access Regulatory Issues and Non-Tariff Barriers
18 Market Access Tariffs - eliminate all duties on bilateral trade Services - highest level of liberalization Investment liberalization and protection provisions based on the highest levels of liberalization and highest standards of protection Government procurement - substantially improved access to government procurement opportunities at all levels of government
19 Regulatory Issues and Non-Tariff Barriers Addressing these behind-the-border obstacles to trade, by reducing unnecessary costs and administrative delays Achieving the levels of health, safety, and environmental protection that each side deems appropriate by adopting WTO-plus norms WTO Agreements on Sanitary and Phytosanitary Standards (SPS) and Technical Barriers to Trade (TBT), currently provide the basis for global norms Establishing global norms through engagement of stakeholders on two sides of the Atlantic
20 Rules Addressing Shared Global Trade Challenges and Opportunities Intellectual Property Rights (IPR) Maintain and promote high level of intellectual property protection, including enforcement Environment and Labour Customs and trade facilitation Ensuring effective measures to facilitate trade between the two sides, with a level of ambition that goes beyond the disciplines under negotiation in the WTO Competition policy Limiting state-owned enterprises and other enterprises that benefit from special government-granted rights Localization barriers to trade Measures designed to protect, favour, or stimulate domestic industries, services providers, or intellectual property at the expense of imported goods, services, or foreign-owned or foreign-developed intellectual property
21 EU s Proposal on Investment (November 2015) Investment and regulatory measures/objectives The proposed agreement on investment shall not affect the right of the Parties to regulate within their territories through measures necessary to achieve legitimate policy objectives, such as the protection of public health, safety, environment or public morals, social or consumer protection or promotion and protection of cultural diversity Number of changes suggested in the dispute resolution mechanism, including the provision for Alternative Dispute Resolution and Consultations Permanent Appeal Tribunal to hear appeals from the awards issued by the Tribunal
22 What must be Done? Engaging the governments to make the process of FTA negotiations more transparent Case has to be made that trade negotiations affect the lives of the millions, and that lessons must be learnt from the implementation of the existing FTAs Trade unions need to take the initiative for analysing the impacts of trade liberalisation in each country... And use forums like the ones provided by ACTRAV to share the experiences for adopting a common position based on common understanding
23 Thank you
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