24 January 2017 Current Affairs: US President Donald Trump signed an executive order to formally pull US out of the negotiating process of the Trans-Pacific Partnership (TPP), a mega trade deal of 12 Pacific Rim countries.
TPP was one of the major international trade initiatives of his predecessor Barack Obama aimed to set trade rules for the 21st century and bind US allies against growing Chinese economic clout. During the Presidential election campaign, Trump had vowed to withdraw the US from the TPP which he argued was harmful to American workers and manufacturing.
Trans-Pacific Partnership (TPP) : The TPP is a trade agreement under negotiation among 12 Pacific Rim nations accounting for 40% of the world economy.
It was promoted by US and signed by 12 countries in 2015. 12 members are Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, US and Vietnam. India was not part of TPP. The aimed to ease the flow of goods, services and investments among member countries and set trade rules for 21st century especially on labour standards, environmental issues, origin criteria and intellectual property.
The mega trade deal was considered as counterweight to growing global economic clout of China, the largest economy in the Pacific Rim.
It might have led to market share losses for certain categories of India’s exports due to preference erosion. It could have indirectly impacted exports in several industrial sectors such as textiles, leather, clothing, plastics, cotton and yarn. Even India’s pharmaceutical sector might had suffered due to higher standards compared WTO norms, including on IPR and ever-greening of patents.