To em­brace mega re­gional pacts... ‘Pre­pare and un­der­take do­mes­tic mar­ket re­forms’

FICCI Business Digest - - Contents -

T he chal­lenge posed by the pro­posed mega-re­gional trade pact - the Tran­sPa­cific Part­ner­ship (TPP) - will im­pact In­dia's ex­ports sig­nif­i­cantly and the coun­try would do well to make a con­certed all-round ef­fort to pre­pare for and un­der­take do­mes­tic mar­ket re­form and push for not just ex­port of man­u­fac­tures but also of ser­vices and agri­cul­tural prod­ucts, said Suresh Prabhu, Union Min­is­ter for Rail­ways.

Inau­gu­rat­ing the con­fer­ence on 'Chang­ing Global Eco­nomic Sce­nario: Im­pli­ca­tions for In­dia's Trade Pol­icy and Make in In­dia Pro­gramme', or­gan­ised jointly by FICCI, In­ter­na­tional In­sti­tute for Sus­tain­able De­vel­op­ment (IISD) and Cen­tre for WTO Stud­ies in New Delhi on May 12, 2015, Prabhu said, “Change is in­evitable and we have to change our­selves with the im­pend­ing change” in the global eco­nomic ar­chi­tec­ture. “We need to find out how to cre­ate a le­gally bind­ing frame­work where ev­ery coun­try is a win­ner,” he added.

In the emerg­ing global eco­nomic en­vi­ron­ment, do­mes­tic re­forms would be the key to im­prov­ing prod­uct stan­dards, manufacturing and ser­vices de­liv­ery. Such an ap­proach was vi­tal to re­main com­pet­i­tive in the global mar­kets as the US was fast track­ing the fi­nal­i­sa­tion of TPP.

The TPP is be­ing pushed by the US for greater trade with Asia Pa­cific coun­tries in­clud­ing Aus­tralia, Brunei, Canada, Chile, Ja­pan, Malaysia, Mex­ico, New Zealand, Peru, Sin­ga­pore and Viet­nam (rep­re­sent­ing 40 per cent of global GDP), and ne­go­ti­a­tions are on.

The do­mes­tic fac­tors con­tribut­ing to ex­ports slow­down in In­dia in­clude weak in­fras­truc­ture, chal­leng­ing labour laws in the case of manufacturing, ris­ing wages and scarcity of skilled labour in the case of ser­vices, he said.

The com­merce min­istry in its five-yearly (2015-20) for­eign trade pol­icy re­leased re­cently said the new fea­tures of the global trad­ing land­scape such as mega-re­gional agree­ments will pro­foundly af­fect In­dia's trade. “They go well be­yond trade in goods and ser­vices into ar­eas such as in­vest­ment, com­pe­ti­tion (in­clud­ing state-owned en­ter­prises), in­tel­lec­tual prop­erty, labour, en­vi­ron­ment, gov­ern­ment pro­cure­ment, trans­parency, reg­u­la­tory co­her­ence and dis­pute set­tle­ment,” he said.

Ear­lier, while ad­dress­ing a panel on se­nior pol­icy mak­ers, Ra­jeev Kher, Com­merce Sec­re­tary, Gov­ern­ment of In­dia, said that In­dia must recog­nise emerg­ing chal­lenges from the mega re­gional agree­ments cur­rently un­der ne­go­ti­a­tion, and start pre­par­ing right away. He added that the need of the hour was to rev up the do­mes­tic econ­omy keep­ing in mind a long term growth.

Kher said that In­dia needs to fo­cus on fun­da­men­tals rather than front end trade pol­icy. In­dia needs to have new ag­gres­sive and strate­gic FTAs that are prod­uct and ser­vice spe­cific with coun­tries with which FTAs are be­ing presently ne­go­ti­ated. He added that in­te­gra­tion with Asia and South East Asia would also

Suresh Prabhu, Union Min­is­ter for Rail­ways, ad­dress­ing the con­fer­ence.

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