NEW DELHI: Amid the uncertain global trade scenarios, which has magnified further following the election of US President Donald Trump, who withdrew from the 12-member Trans-Pacific Partnership (TPP) trade deal and advocated trade-protectionism agenda, an alternate multilateral trade deal between 10 nations could prove to be beneficial. The trade deal comprising of middle-income economies such as Australia, China, Japan, Brazil, India, Indonesia, Mexico, New Zealand, South Africa and UK could help bring about some semblance of trade-dignity in the international trade arena and also uplift the economic conditions in these countries.
India’s Chief Economic Adviser to the Union Government, Arvind Subramanian along with the Commerce Secretary Rita Teotia and several global trade analysts and academicians contemplated upon the ways to revitalise global trade. Subramanian noted that rapid globalisation has squeezed the economic growth of the developed economies while shifting economic developments from their territories to the emerging market regions.
Multilateralism is the way forward for emerging powers to keep rising. Bilateral agreements and MFNs (most-favoured nations) give limited scope of trade to the partner countries and may also lead to infringement in the long run, as the product quality required for the global market may not be in accordance with the WTO framework. This is a reason why, countries with the greatest market openness i.e. middle-income countries and emerging market countries, could play a key role in global trade and economic growth revival in the coming few years. Multilateralism will also continue as the movement in investment and technology will present a need to have solid multilateral agreements.
For India, this requires a willingness to keep its market open in order to freely access the markets of other countries. Perhaps having an ‘open market’ and imploring other developing and middle-income countries to ‘open’ theirs will help India’s trade tremendously. Many middle-income countries have fervently been trying to turn into high-income countries. They have a lot at stake, individually, but they need to make a collective effort to discover areas where their bilateral or multilateral trade engagements could stimulate overall economic growth.