Mega regional trade agreements (such as the Trans-Pacific Partnership, the Transatlantic Trade and Investment Partnership, the EU-ASEAN free trade agreement) are new features on the international trading landscape with the potential to bring about enormous changes in world trade dynamics, given their coverage and scope.
These agreements create a significant additional layer in the global trade architecture for preferential trading among prominent members of the World Trade Organisation. With tariffs already low in many of the participating countries, the focus is on rules harmonisation, achieving coherence, and removal of non-tariff barriers.
When concluded they are expected to pose some challenges to India on account of erosion of trade competitiveness as a result of reduction in tariffs among the participating countries members as well as the increased cost of compliance with the higher standards that they are expected to impose on not only trade among themselves but also with others outside those groups.
However, as this study argues, such challenges should be considered as opportunities to make the Indian economy, in general, and our trade, in particular, more competitive. India needs to find a balanced strategy to respond to the potential effects of mega regionals to advance its trade competitiveness and ensure critical development objectives.