New Delhi, Nov 22 (KNN) US President-elect Donald Trump, through a video message, today said that US will pull out of the Trans-Pacific Partnership (TPP), the world's largest trade deal, on his first day in the White House.

The TPP is a trade and investment agreement between the US, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru. India is not part of the TPP. These 12 countries together cover 40% of the world's economy.

The mother of all trade agreements, the TPP was criticised and opposed by civil society groups for over seven years now.  TPP was opposed also because of the secrecy surrounding its negotiations that would have impacted the health, environment and labour of the countries involved.

India not being a part of TPP could have suffered some diversion of its trade with the US and other member countries as TPP countries alone contribute to nearly half of world’s total trade share.

The US is India’s second biggest trade partner and the single biggest export destination. India exported goods worth Rs 2.6 lakh crore to the US in 2015-16. The US accounts for over 15 per cent of India’s exports (in value terms) with pearls and gemstones, textiles and apparel and pharmaceutical products being the top items of export.

TPP can be a serious cause for India’s fall in trade with the US.

Talking to KNN, Anil Bhardwaj, Secretary General, Federation of Indian Micro and Small & Medium Enterprises (FISME) said, “The TPP would have posed a formidable challenge for India and would have resulted both trade and FDI diversion as other than US, Australia and Japan all other TPP partner countries are competing economies for us.   For a country like India and especially SMEs, the best option remains a multilateral agreement under WTO.  RCEP also seems promising for India.”

Meanwhile, 70-year-old Trump described the TPP as a "potential disaster" for America and also highlighted concrete steps that he will take to "Drain the Swamp" in Washington DC and put America first by focusing on the issues of trade, energy, regulation, national security, immigration and ethics reform.

"On trade, I am going to issue our notification of intent to withdraw from the Trans-Pacific Partnership, a potential disaster for our country. Instead, we will negotiate fair, bilateral trade deals that bring jobs and industry back onto American shores," Trump said.

Hours before Trump's announcement, Japan's Prime Minister, Shinzo Abe, said that the Trans-Pacific Partnership (TPP) would be "meaningless" without US participation.

Abe, who attended a gathering of TPP leaders in Lima on Saturday, said there was no discussion at the meeting that other members should try to put the TPP into effect without the United States.

Meanwhile, Vietnam and Malaysia were set to gain the most from the deal as they already have access to the US markets for their products and the TPP would have helped them in tariffs on some of their key exports.

China, on the other hand, could step in with a regional trade deal, also known as the RCEP. (KNN Bureau)