Indian economist warns of TPP geopolitical concerns - suggests BRICS should form trade bloc

By  Janet M Eaton      Visiting senior research fellow at the Institute of South Asian Studies, National University of Singapore. Dr. Amitendu Palit, in his artilce TPP may drive BRICS into action, offers that the TPP has given rise to the following major geo-policial and strategic concerns :   1] The first is that the agreement maximizes US business interests and minimizes those of others. He gives as an example the strong and rigid IPR rules that will allow US products easy entry into other countries, while similar products from other countries may be denied access to the US market on grounds of piracy.  

 2] The second concern is that the TPP attempts to create a major trade block without some of the biggest emerging economies e.g. none from the BRICS group - Brazil, Russia, India, China and South Africa. China's exclusion has given rise to views that the US is driving the TPP with the strategic objective of marginalizing China.    

 3] The third is its impact on Asian integration. Various models of economic integration are being pursued in Asia: Free Trade Area for the Asia-Pacific by APEC, Comprehensive Economic Partnership for East Asia by the East Asian Summit and the East Asia Free Trade Area by ASEAN, China, Japan and the ROK. All these efforts will be hampered by the advent of the TPP, which will add a strong "non-Asian" flavor to economic integration efforts in Asia and force Asian economies to develop different strategies for regional integration. The complications created by the TPP are becoming visible in Asia. Japan and the ROK, Emerging markets like China, Brazil and India will find it difficult to join the TPP, given its rigid rules and the US dominance.  

   Dr. Palit concludes the BRICS should provide an alternative trade framework to the TPP by creating rules that are easier to implement and follow by emerging market industries. A strong BRICS structure will also strategically balance global trade, which could otherwise be dominated by the TPP he says. [1]    

  However, a in a  recent article, Among Neighbours- How to energize India's Look East Policy, Jayanta Roy, a well-known trade economist, writing in the Calcutta Telegraph, India, suggests a more strategic tactic would be  to energize  India’s trade policy rightly focused on the "Look East" policy, recognizing  that India needs to become integrated into the cross-border production and trade networks in Asia .In particular  Roy urges focusing on energy trading relationships noting fossil fuel trading options in Myanmar [world’s 10th-largest natural gas reserves] , Indonesia [world’s biggest exporter of coal] ;  Malaysia and Indonesia - the world’s second and third largest exporters of liquefied natural gas ; and  Vietnam  expected to emerge as a major exporter of oil. He is less sanguine than Palit about the BRICS and related emerging country platforms for maximzing India's international economic priorities.  [2]   


References:
  [1] For Dr Palit's article in the ChinaDaily  TPP may drive BRICS into action http://www.chinadaily.com.cn/bizchina/2012-09/06/content_15738324.htm  Dr. Palit is an economist specialising in international trade and foreign investment, his current research interests are China-India comparative economic dimensions, Asia’s trade architecture, and political economy of climate change in India. He is presently head (partnership & programmes) and visiting senior research fellow at the Institute of South Asian Studies, National University of Singapore.  Dr Palit worked in India’s Ministry of Finance for a decade and handled India’s external sector, industrial and infrastructure policies.  

   [2] Among Neighbours- How to energize India's Look East Policy by Jayanta Roy, Aug 31, 2012 http://www.telegraphindia.com/1120517/jsp/opinion/story_15494798.jsp#.UE... Jayanta Roy is Director of Corporate Planning & Strategy, Director, Member of Project Review Committee and Member of Investment Committee, The Peerless General Finance & Investment Co Limited.