Sachin Kumar Sharma

An Analysis of Tariff Reductions in the Trans-Pacific Partnership (TPP): Implications for the Indian Economy

Our purpose is to undertake a comparative analysis of the likely impact of tariff reduction under the Trans-Pacific Partnership (TPP) on various macro and trade variables of the Indian economy under different scenarios. The TPP was concluded in October 2015, but it is yet to be ratified by the partner countries, and while Asian giants like India, China and Korea have not joined the TPP, there are some talks about their joining the partnership in future. Ours is a unique study that evaluates India’s perspective on joining the TPP, in terms of tariff reduction, and not in terms of the removal of non-tariff barriers. We employ the widely used standard Global Trade Analysis Project (GTAP) model for this exercise. This is a unique framework with a global economy-wide approach, in a Computable General Equilibrium (CGE) setting. Five different scenarios of complete integration in terms of tariff reduction between different regions are simulated using the GTAP model. Under each scenario, the tariff among members of a group of regions is eliminated, but is unchanged for other regions. Higher welfare arising from allocative efficiency comes with the cost of a relatively lower consumption of domestic products and investment, resulting in a loss in terms of GDP. Therefore, we conclude that there are mixed prospects and no strong reason for India to pursue being part of the TPP in future, from a perspective of tariff reductions. JEL Classification: F15, F17

Trade Facilitation in the Commonwealth: An Economic Analysis

This article examines the economic impact of trade facilitation between Commonwealth country members, using a global computable general equilibrium framework. We document enormous economic impact, much higher than a complete tariff liberalisation amongst these countries. The economic impact is quite visible in terms of welfare, gross domestic product, employment and trade in several sectors. We abstract from the costs involved in such trade facilitation—accounting for them is beyond the scope of this study. JEL Classification: F13, F62, F68

Mega Trading Blocks: Is Time Ripe for ASEAN–SAARC FTA?

The plethora of Regional Trade Agreements, especially in Asia, has created a complex web of noodle bowl, which has made trade more difficult. Many countries of Asia are now trying to be part of mega-free trade agreements (FTAs). While Association of Southeast Asian Nations (ASEAN) is consolidating through ASEAN+1 initiative leading to Regional Cooperation and Economic Partnership (RCEP), no such effort has been initiated so far by the South Asian Association for Regional Cooperation (SAARC). This study thus examines the possible effects of regional integration between ASEAN and SAARC on various sectors, as well as on macro-economic and trade areas by using the Global Trade Analysis Project (GTAP) model and database. A scenario of a complete integration between ASEAN and SAARC is simulated using the GTAP model, where the tariffs between ASEAN and SAARC are eliminated on all items but maintained for other trading partners. This article suggests for, among others, consolidation of ASEAN and SAARC FTAs, which will have a greater welfare enhancement, though some sectors will require adjustments due to their sensitivities. The article recommends for a policy dialogue between ASEAN and SAARC as such a process can only be initiated through a political engagement. It also recommends that the developing countries shall eliminate their tariffs in 5 years and allow longer time frame for the LDCs.

Conclusion and Way Forward

This chapter summarises the main findings of this book and discusses the way forward to solve the problems faced by the developing countries on account of rules of the WTO. China, Egypt, India, Indonesia, Jordan, Kenya, Morocco, Pakistan, Tunisia, Turkey, Zambia and Zimbabwe already face constraints in implementing food security policies due to the existing rules of AoA. There is a need to find a permanent solution to the problems faced by developing countries in implementing food security policy under the outdated provisions of AoA. This chapter discusses the various options to find a permanent solution to the issue of public stockholding for food security purposes and points out that common negotiating position of developing countries at the multilateral forum of the WTO will be useful to achieve a permanent solution to the issue of food security.

Food Security and Agriculture Sector

This chapter gives an overview of food security situation in selected developing countries. Various indicators of food insecurity in developing countries are discussed and analysed. It highlights the importance of agriculture sector and need for government intervention in the form of price support and public distribution policies to fight against hunger, undernourishment, food insecurity and poverty.

Turkey: Product Specific Support to Wheat Under WTO Regime

This chapter discusses and seeks to estimate product specific support to wheat in Morocco under WTO regime. ONCIL is a major player in the grain market and plays an important role in providing food security to millions of people in Morocco. In this chapter, product specific support to soft wheat is calculated by assuming eligible production as 100, 50 and 25 % of total grain marketed through ONCIL. Results show that product specific support to soft wheat exceeded the final bound AMS limit under different scenarios. It indicates the policy space erosion for implementing food security policies due to existing provisions of AoA.

Domestic Support Under Agreement on Agriculture

This chapter analyses the various provisions related to domestic support to agriculture sector under the WTO rules. It provides a snapshot of domestic support to agriculture sector in selected developing countries. This chapter also focuses on the relevant provisions of AoA which have implications for the policy space of selected countries in implementing price support and food security policies in developing countries.

India: Product Specific Support to Wheat and Rice Under WTO Regime

The Food Corporation of India (FCI) plays an important role in food security of millions of people through procurement of foodgrains at minimum support price (MSP) and distributing it through public distribution system. Given the sensitivity of food security issue at the WTO and in India, this chapter seeks to provide an analysis of product specific support to wheat and rice based on domestic support notifications submitted by India to WTO. Product specific support to wheat and rice was below the de minimis limit during 1995–96 to 2010–11. However, product specific support to rice producers was around 7.21 % during 2010–2011 and it is likely that product specific support to rice would cross the de minimis limit in near future. It shows the erosion of policy space for India to procure rice at the administered price for food security purpose.

Indonesia: Product Specific Support to Rice Under WTO

Food security policy in Indonesia is designed to fulfil basic human necessities which provide fair, equal and sustainable benefits based on the concepts of food resilience, self-sufficiency and food security. BULOG procures rice for the implementation of the RASKIN programme, a social safety net programme for poor and vulnerable sections of the society. In this chapter, product specific support to rice is calculated for the period 2010–2014. It shows that Indonesia is at the risk of breaching the de minimis limit in near future. This could have serious adverse implications for the operation of BULOG for the implementation of the RASKIN programme.