A multi-lateral trade agreement between 12 countries on the Pacific rim, the Trans-Pacific Partnership or TPP, in short, had been a rallying point for both US presidential candidates, with President-elect Donald Trump insisting on doing away with the pact absolutely, simplistically insisting that it allowed for jobs to move out of the USA. His argument was based on the fact that the TPP would benefit importers and exporters by the reduction or elimination of tariffs on qualifying products moving between member countries. These lower costs would make sourcing from member countries such as Vietnam and Brunei more attractive. The outcome of the lower costs was projected to have a positive impact on supply chains, including intra-city logistics, across the board and opening up new supply chain traffic patterns. It created a standard of rules and regulations (for example, quality of the product, product safety, labeling and shipping restrictions) and addressed new trade challenges including a sustainable supply chain.
The 11th of this month may have sounded the death knell for the pact as the USA withdrew from the partnership, followed by Vietnam. For a country like India, the passing of TPP might have meant stricter regulation of transport and logistics for much of the exports, and may even have pushed for a change in regulations in the logistics and shipping sector. A partnership so large and affecting a number of India’s trade partners would have put pressure on recognizing issues within the shipping industry and making practices pertaining to logistics and shipping more stringent and transparent, which would have been in sync with the current economic and political sentiment in the country.
Considering that the TPP is not going through anymore, the effects of the same may even be an opportunity for India to step up as an Eastern leader and set an example by standardizing logistics and shipping regulations for global trade. A typical laidback approach, on the other hand, will mean that there is no pressure pushing India and its logistics sector very urgently and considering the drastic demonetization step, it might even seem like a boon to those dreading the TPP in India. However, a trade agreement in the area, with India being a participant would mean good news owing to the increase in a number of goods being shipped due to lower tariffs, as well as opening up trade.