Twelve countries on both sides of the Pacific have concluded what is termed a “Big Deal”, which is sought to liberalise trade among the participating countries, set common standards and cut barriers.
The Trans-Pacific Partnership (TPP) is a trade and investment agreement among Pacific Rim nations such as Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam.
On some measures, this trade deal is seen as the “largest ever” outside of the World Trade Organisation (WTO) - it is believed to cover 40% of the global economy.
The deal, whose detailed terms are yet to be released, may also address important trade-related matters such as policies towards intellectual property and state-owned enterprises.
The accord is believed to include several policies that would facilitate smooth trade and investment between Pacific countries; key among them being lowering tariffs.
Experts say the deal would also address many non-tariff barriers, such as the standards and regulations that govern some services and investments.
Interestingly, two major emerging economies,China and India, have been left out of the TPP trade negotiations with some experts already warning that the partnership might adversely affect these two south Asian giants.
China is home to 1.35bn people; India has a population of 1.25bn. At the current rate of growth, they will become the largest and third-largest economies in terms of purchasing power in the next decade.  By 2016, they will account for around 40% of world trade, compared with 15% in 2006.
Opponents say the deal is more about consolidation of power or “managed trade” rather than “fair trade”. They argue the economic benefits of the deal will go only to big corporates, and not ordinary workers in any of the participating nations.
Many Indian trade experts maintained that the south Asian country was deliberately kept out of the Trans-Pacific Partnership.
There is a notion the TPP leaders wanted to both “isolate China and marginalise difficult countries such as India”.
That said, India did make efforts to co-operate with the TPP with Prime Minister Narendra Modi repeatedly saying he wanted to join the Asia Pacific Economic Co-operation forum, a TPP prerequisite.
However, the TPP still has many loops to jump, including legislative approval by all of its 12 signatories. Any TPP deal will have to be ratified by national parliaments and then implemented before it really starts having an impact. If the previous pacts are anything to go by, the changes won’t be implemented overnight.
Sceptics point out the ratification of TPP needn’t be smooth and will certainly run into the electoral timetables and legislative constraints in certain key members, such as Australia, Canada, Japan and the United States.
While China and India may face challenges from the Trans-Pacific Partnership, a recent report showed that in terms of “adverse impact on outsiders’ national incomes”, even by 2025 these are estimated to be only 0.2% of Chinese GDP, 0.1% of Indian GDP and less than 0.1% of EU GDP.
Such estimates hardly imply a large defensive interest in joining the TPP.
Simon J Evenett, a renowned professor of International Trade and Economic Development, University of St Gallen, Switzerland, recently wrote:“Outsiders can see if the TPP really delivers and decide accordingly. Rather than fear the TPP, learn from it.”
Clearly, nations outside of the Trans-Pacific Partnership ought to see what TPP can and cannot achieve.