Trade and Economic Partnership Agreement (TEPA)

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Trade and Economic Partnership Agreement (TEPA)

Trade and Economic Partnership Agreement (TEPA)

News: The Secretary General of the European Free Trade Association (EFTA) laid stress on the potential benefits of a Trade and Economic Partnership Agreement (TEPA) between India and Iceland, Liechtenstein, Norway, Switzerland (EFTA states).

What is TEPA?
 A trade and Economic Partnership Agreement is a type of economic partnership agreement between countries.
 TEPA agreements offer flexibility in terms of negotiating terms and conditions, as the parties involved can tailor the agreement to their specific needs and interests.
 TEPA agreements often include stronger provisions on labor and environmental standards, as well as provisions for dispute settlement and enforcement mechanisms.
 TEPA agreements are designed to promote mutual benefits for both parties, rather than being one-sided.

EFTA
 European Free Trade Association (est. 1960; HQ: Geneva) is an intergovernmental organization founded by four European countries: Iceland, Liechtenstein, Norway and Switzerland as an alternative to the EU.
 It looks to promote free trade and economic cooperation among its member states and with other countries.
 EFTA has a close relationship with the EU and has signed several agreements, which allow for the free movement of goods, services, capital, and people between the EFTA countries and the EU
 The EFTA countries have strong economies. They rank among the highest in the world in innovation, competitiveness, wealth creation per inhabitant, life expectancy, and quality of life.

What are the positives of TEPA between India and EFTA states?
 Improved market access for goods would boost India's export potential to EFTA markets.
 India can benefit from EFTA support in as India seeks towards clean energy transition. Leadership and investments of EFTA countries will be helpful in Green technologies.
 EFTA states have already contributed significant investments of over USD 35 billion in India. The TEPA will further increase investments in India.
 EFTA states can benefit from India’s highly skilled workforce in the services sector, and India can benefit from the over 400 companies established by EFTA states generating more than 1,50,000 jobs.
 India aims to meet 50% of its energy needs with renewables by 2030. EFTA states can contribute to India's green growth aspirations with their cutting-edge technologies.

Potential Challenges:
 The EFTA states are highly developed economies with a focus on high-tech industries and services, while India is a developing economy with a more diverse economic structure.
 The agreement must address market access issues and address concerns regarding tariffs, quotas, and nontariff barriers, to ensure free and fair trade between the parties.
 Differences in regulations, standards, and legal frameworks.
 EFTA states are small, but their economies are highly competitive, particularly in sectors such as pharmaceuticals, biotechnology, and machinery manufacturing. Addressing competitive challenges to ensure a level playing field and fair competition is essential.
 Addressing environmental and social challenges, such as promoting sustainable development and gender equality, is crucial in establishing a long-term, successful partnership between the parties.
 Negotiating a mutually beneficial agreement that meets the interests of all parties involved can be challenging. This includes addressing outstanding issues and achieving a balanced agreement with strong political involvement and guidance.

Way Forward:
 The delegates from EFTA and India should work towards resolving any outstanding issues and should identify areas of mutual benefit, such as technology transfer, R&D and innovation, business collaboration, and market access for goods, to increase trade and investment ties.
Source – The Indian Express