Quantifying TPP and TTIP Spillovers on India

Abstract

The Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership will impact on substantive market regulations in a wide a range of areas bearing on market access, both by establishing substantive new horizontal and sectoral standards and by establishing requirements regarding institutional and procedural approaches to domestic market regulation. Network effects, including through other agreements involving TPP/TTIP economies, and global supply chains organized by firms in the TPP/TTIP jurisdictions, will have the effect of broadening the reach of TPP/TTIP measures beyond the immediate parties to the agreement. This study employs the global dynamic multi-region multi-sector model, GDyn, to draw inferences concerning the impact on India of the likely outcome of the TPP and TTIP in respect of market regulation. Both tariff and NTB reductions associated with TPP/TTIP as well as the rise in standards have an overall negative effect on India. Compliance with labour standards is the most costly scenario for India. On the other hand, not complying with the emerging global standards would prove counter-productive for India’s exports. Based on this analysis, the study considers the preparations that India might contemplate to maintain its competitive position in global markets. The study comments on priorities based on the scale of likely impacts in different areas.