INTERNATIONAL
Demand to remove anti-dumping duty on yarn is being raised from various circles including Federation of Surat Textile Traders Association (FOSTTA), Malegaon Industries and Manufacturers Association (MIMA), Bhiwandi Powerloom Federation and other organisations working for the industry. Also Hyderabad MP and All India Majlis-e-Ittehadul Muslimeen (AIMIM) President Asaduddin Owaisi making a strong appeal to the government to remove anti-dumping duty on synthetic yarn, on Wednesday said that the government's 'Make in India' policy is proving disastrous for the local textile industry. The government's Make in India policy is helping just a handful of corporate. It is destroying the local textile industry, Owaisi said in the Parliament on Wednesday.
Distressed people in Malegaon, Bhiwandi, Surat, Sholapur and other textile centers are looking at them with hope and anticipation. The government should without further delay remove the anti-dumping duty on the synthetic yarn imported from China. Owaisi was referring to a government GR dated October 21, 2015 wherein it has imposed anti-dumping duty on imports of All Fully Drawn or Fully Oriented Yarn/Spin Draw Yarn/Flat Yarn of Polyester (non-textured and non POY). Because of this government policy, the cost of grey fabrics produced in the country is going up by about 30%. On the other hand, countries like China, Sri Lanka, Bangladesh and Pakistan are given free run to export their produce in India. Giving a brief overview of the textile industry, Owaisi said that there are about 2.5 million power looms in India providing livelihood to more than 6.3 million people. Textile sector is largest after agriculture. But today the sector is struggling because of governments disastrous policy.
The textile industry in India is in recession mode since two years now. Those associated with the industry said that they had not seen such a situation in last 30 years. The government should remove the anti-dumping duty on yarn, and instead impose a duty on import of fabrics coming from China, Pakistan, Bangladesh and Sri Lanka as the local manufacturers cannot compete with them because they are forced to buy expensive yarn due to the anti-dumping duty.
SOURCE: Yarns&Fibers
India's cotton production in 2015-16 has declined to 338 lakh bales (one bale of 170 kg each), down 12.4 percent from 386 lakh bales in the previous year, to hit a six-year low, according to last month's update of Cotton Advisory Board (CAB). According to the Union agriculture ministry, area under cotton as on August 5 was 96.48 lakh hectare as against 105.68 lakh hectare a year ago. So the cotton production in the country is expected to hit a seven-year low in 2016-17 because of a reduction in the area under cultivation and pest attacks in top producer state Gujarat, even as domestic prices have started firming up after a poor season. Cotton imports in 2015-16 may have been the highest in a decade, industry insiders said. Imports may see a new high this fiscal as the overall area where cotton has been sown has declined 8.7 percent. NK Sharma, managing director at Gujarat State Co-operative Cotton Federation, said that the industry expects cotton production to further decline to 310-315 lakh bales in 2016-17. Keshav Kranthi, director at Central Cotton Research Institute (CICR), Nagpur said that as compared to its normal area of about 28 lakh hectares, sowing was completed on 22.8 lakh hectare in Gujarat as on August 8. While, in Punjab the area is down by over 25 percent as compared to its normal area.
Higher production in Maharashtra, where weather conditions are looking favourable as of today, is not expected to fully compensate for the fall in Gujarat and Punjab. Pink bollworm in Gujarat and white fly in north India had led to severe crop damage last year. This year, CICR scientists said that, white fly infestation is restricted to pockets such as Fazilka and Abohar in the north. But, the late sown cotton in Gujarat, which is 30 percent of the total cotton sown, is likely to get affected by pink bollworm on a large scale. According to scientists and industry insiders, cotton production is expected to fall in key states such as Gujarat, Punjab and Haryana.
SOURCE: Yarns&Fibers
In ICRA's view, a 12% (lower rate) recommended by the Dr. Arvind Subramanian Committee is likely to have a negative impact on the textile sector, especially the cotton value chain, which is currently attracting zero central excise duty (under optional route); unlike the man-made fibre sector, where the fibre attracts excise duty at the manufacturing stage (unlike cotton). Hence there is an incentive for the downstream players in manmade sector to avail the Input Credit Tax (ITC). ICRA points out that the most of the cotton based textile players in the value chain operate through the optional route, thereby resulting in lower duties. The key reasons for the same are exemption on cotton and hence the lower ITC for cotton spinning mills; as a result the cotton yarn manufacturers opt for the optional duty route without claiming ITC and pay zero excise duty. Mr. Anil Gupta, VP, Corporate Sector Ratings, ICRA Ltd said, "With an optional duty structure at the cotton yarn stage itself, the downstream sectors, i.e. weaving, processing and garments also operate under the optional route. This is reflected in the less than 1% effective excise duty rate applicable to ~480 spinning and weaving companies rated by ICRA, which accounted for ~Rs 57000 crore revenue during FY2015."
On the positive side, under GST, textile players which are oriented towards domestic markets will be able to ITC on domestic capital goods (but not the import duty) as their sales will be subject to GST. Accordingly, this will reduce the cost of capital investments and hence will be positive for the players operating in domestic markets. "With GST on textile, the textile value chain will become more organised as it will make GST non-compliant suppliersuncompetitive vis a vis GST-compliant suppliers, as the buyers won't be able to take ITC," he adds. "Due to the reduced tax advantage of cotton yarn vis a vis man-made yarn, there can be a gradual shift in the domestic textile industry, which currently operates with a fibre mix of cotton: manmade of 60:40; as against a global average of cotton: manmade of 40:60. However, the above impact will be dependent on the final rates which will be applicable to the sector," he reiterated. The exports will be zero rated under the GST as there will be transparency and availability of full ITC for exporters which is currently being provided by duty drawback schemes. Accordingly the duty-drawback will lose its relevance under GST; however sectors where the drawback rates are higher than actual indirect taxes on inputs may face profitability pressures, an ICRA assessment states.
SOURCE: The Economic Times
Textile and clothing sector accounts for roughly 5 per cent of India’s GDP, 15 per cent of its industrial output and export earnings and provides livelihood support to 55-60 million people directly or indirectly. India is not a party to the Transpacific Partnership Pact (TPP) comprising Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the US. However, it has serious implications for India’s textile and clothing sector as the US is a key export destination. Post-Brexit turmoil in Europe will further increase India’s dependency on US markets.
A bad pact
When it comes to export of readymade garments and made-ups, the US alone accounts for over 30 per cent of India’s total exports. TPP will affect textile and clothing sector of India (and of all non-TPP member countries such as Brazil or China) in two ways: First, exporters from TPP member countries will get preferential access in the US market vis-à-vis the exporters from non-TPP member countries like India. This will put India’s apparel exports (to the US) at a disadvantage as the US import duties on apparels are quite high with average duty ranges around 7.9 per cent and duties on many clothing items are as high as 32 per cent as per WTO database. Secondly, a key feature of the TPP, ‘yarn forward rule’, makes it mandatory to source yarn and fabrics used in making clothes from any or a combination of TPP countries to avail duty preference. This is likely to disrupt regional and global supply chain in textile and clothing. Thus, YFR will induce garment manufacturers in the TPP countries to source their inputs from TPP countries at the cost of non-TPP countries such as India or China even if the suppliers in TPP regions are not the least cost. This will be a clear case of trade diversion i.e. moving trade away from more efficient producers to less efficient producers. Already India’s textile and clothing sector is under severe pressure from slowing demand in key export markets, and backdoor entry of Chinese goods via Bangladesh under SAFTA and from other LDCs under DFQF schemes that allow duty free import of garments from Bangladesh and other least developed countries such as Myanmar into India. Exclusion of India’s clothing products from US GSP benefits is yet another source of comparative disadvantage for the sector. If this was not enough, to comply with its commitments to WTO, India will soon have to phase out its export incentives — latest by 2018. India has already achieved a per capita GNP of $1000 at 1990 prices. India’s global export share in textile and clothing has already crossed 3.25 per cent threshold required by WTO to be termed as export competitive with obligation to phase out export subsidies.
Hitting retailers
Only 17 per cent of textile and clothing exports under NAFTA and Central American Free Trade (CAFTA) have gone through yarn forward rule even then the US trade negotiators have incorporated it in the TPP. Clearly, the move seems to be protectionist aimed at reviving American indigenous textile industry at the cost of foreigners. However, insistence on YFR will limit the freedom of clothing retailers to choose their suppliers and minimise their sourcing cost. That explains the strong opposition of clothing retailers (e.g. JC Penny, Levis or Gap) and their associations (e.g. TPP Apparel Coalition) to the yarn forward rule. To deal with this, the US trade negotiators have come up with the idea of ‘short supply list’ — that will give some flexibility to clothing retailers in sourcing their inputs (which are not available in TPP region) from non-TPP countries either temporarily or on a long term basis. However, that relaxation is not sufficient enough.
India’s options
India can’t ignore the most lucrative US market that accounts for roughly one-fourth of its apparel exports i.e. $3.5-4 billion, especially when India’s merchandise exports have been declining for the last 18 months in a row though exports picked up but only 1.27 per cent. Given the prevalence of textile exports in India’s total merchandise exports, reviving exports will require reviving textile and clothing exports. That calls for devising suitable trade strategy to deal with adverse impact of TPP. India’s best bet can be multilateral trade liberalisation of heavily protected textile and clothing sector. Unfortunately, that’s not moving given the American disinterest in WTO and current sentiments in most developed countries are against further trade liberalisation.
Joining TPP can help India’s textile & clothing sector, but accepting WTO plus proposals on intellectual property, investment protection, services and state owned enterprises (SOE) as envisaged under TPP will not find favours among either policy makers or India Inc. Another option would be to relocate part of India’s textile production facilities to countries like Vietnam which is a party to TPP or in a least developed African country such as Ethiopia which has duty free market access to the US. However, exercising this option would also mean relocation of jobs to Vietnam or Ethiopia in addition to other risks associated with investing abroad. However, that would be against the spirit of Make-in-India. Moreover, likely loss in export of textile items to TPP countries will have to be compensated by gains in other markets. Here, tweaking the rules of origin to stipulate utilisation of yarns and fabrics of Indian origin as a pre-condition for allowing duty free import of garments from Bangladesh and other LDCs will help India’s fabrics export. It will also check backdoor entry of Chinese fabrics into India via countries like Bangladesh.
Safeguarding them
Textile and clothing sector is heavily protected in Mercosur countries and maintain import duties of as high as 35per cent on many textile items. Inclusion of textiles under India-Mercosur PTA will improve access to Latin American markets and somewhat compensate for loss of existing export market because of TPP. India also needs to push for reduction Chinese import duties on apparel under RCEP as going forward China can be a high potential export destination for India’s apparel items given the rising wages and per capita income in the country despite growth slowdown. RCEP platform can also be used to improve access to Australian apparel import markets. Some kind of product differentiation (e.g. voluntary carbon labelling) will protect our textile and clothing exports in the US despite the impeding post TPP comparative cost disadvantage vis-à-vis TPP partner countries like Vietnam.
SOURCE: The Hindu Business Line
With the launch of Primante brand, Indian textile major Arvind Ltd has forayed into worsted suiting and plans to garner a market share of 10 per cent in three years and 20 per cent in five years. In a statement, the company said, “It is the perfect combination of Australian Merino wool and Italian design conceptualised for the urbane and affluent Indian customers." "With this brand, we aim to capture a 10 per cent market share of the Rs 2,000-crore worsted suit market segment in the next three years and 20 per cent in the next five years," a company statement said here today. According to the Sanjay Lalbhai led Arvind, Primante has all wool and wool rich fine count fabrics with blends like silk, mohair, lycra, linen and innovative poly filaments. “Apart from suit fabrics, offerings include fabrics for sport coats, tweed jackets and business coats, with product development and quality control parameters of global standards,” it added. Apart from selling the worsted suitings in the domestic market, Arvind also plans to expand its exposure in the high end made-to-measure suits business in India and the world through its venture Creyate.
SOURCE: Fibre2fashion
The textile industry is watching to see what the final rate of tax under the proposed goods and service tax (GST) regime would be. This is because of the tax implications the new law will have on major input goods going into the textile production process such as cotton and man-made fibres. According to a report by financial analysis firm ICRA, a lower 12 per cent rate, as recommended by the Arvind Subramanian committee last year, is likely to have a negative impact on the textile sector, especially affecting cotton value chain. Currently, cotton attracts zero central excise duty under the optional route.
Compared to this, man-made fibre attracts excise duty at the manufacturing stage. Hence there is an incentive for the downstream players in manmade sector to avail of the input tax credit (ITC). With an optional duty structure at the cotton yarn stage itself, the downstream sectors — weaving, processing and garments — also operate under the optional route, Anil Gupta, vice-president, corporate sector ratings at ICRA, said. “This is reflected in the less than one per cent effective excise duty rate applicable to 480 spinning and weaving companies rated by ICRA, which accounted for Rs 57,000-crore revenue during FY15.” On the positive side, under GST, textile players oriented towards domestic markets will be able to avail ITC on domestic capital goods but not the import duty as their sales will be subject to GST. Accordingly, this will reduce the cost of capital investments and hence will be positive for the players operating in domestic markets.
SOURCE: The Business Standard
Welspun Global Brands has recently become a licensed towel supplier for football club Manchester United and Walt Disney, after marking its presence in the international sporting events like Wimbledon and ICC through its terry towels and home linen products. The company will launch limited-edition towels in the licenced category in the next couple of months and will be sold through a range of its retail outlets across 55 cities and online platforms. Subrata Pal, senior vice president, Welspun Global Brands said that for the Manchester United, they are offering youth collection therefore besides towels they will also offer bed-sheets. On the back of product innovation, organic and inorganic growth, Welspun India is aiming at 25 per cent share in revenue to come from its domestic home textiles business by 2020 as against the current 5 percent. According to Pal, India's total home textiles market is seen at Rs. 47,850 crore, out of which around Rs. 33,000 crore is urban market.
To further boost domestic retail sales, especially in the premium category, Welspun recently launched an innovative range of bedsheets and towels based on the hygro-cotton technology. The products - dubed as smart textiles - will have features such as temperature regulation in bed linen with upto 3 degree Celsius, the towels enhance absorption and softness with each wash. The product will be retailed through the company's premium retail network 'Spaces Home & Beyond'. The technology is patented for use of innovative yarn which makes towels more fluffy and soft with each wash and become more absorbent. As a premium brand, towels and bedsheets at Spaces Home & Beyond outlets are priced in the range of Rs 700-1700 and Rs 1500-6000, respectively. Combined with its value brand WellHome, Welspun has around 225-odd shop-in-shop outlets and 1500 multi-branded outlets (MBOs). Despite equal number of outlets, about 80% of its domestic retail revenue comes from the premium Spaces brand while 20% comes from WellHome.
SOURCE: Yarns&Fibers
Kumar Mangalam Birla, chairman of Aditya Birla Group, on Thursday announced the merger of Aditya Birla Nuvo (ABNL) with Grasim Industries to create an entity with Rs 60,000-crore annual revenue or about $9 billion. This will be followed by the demerger of the financial services business into a separate listed company. ABNL has interests in Aditya Birla Financial Services (ABFSL), telecom (Idea Cellular), textiles and fertilisers, along with new ventures such as payments banks and solar power through various entities. Its financial services business is seeing high growth and needs funding. Grasim, on the other hand, has presence in cement, chemicals and viscose-staple-fibre businesses. "The new entity will have a mixture of mature and new-age businesses with steady cash flows. This is one of the primary objectives of the merger," said Birla. "The other objective is to unlock the value of the financial services firm, which will now be separately listed," he said. The listing of the demerged financial services business by May next year is also expected to help it raise funding. This will simplify the cross-holdings in various operating companies, he said.
Aditya Birla Nuvo to merge with Grasim According to the scheme, shareholders of ABNL will get three new shares of Grasim for 10 shares in ABNL. After the merger, every share in the "new Grasim" will entitle seven shares in ABFSL, when it gets demerged. For example, a shareholder with 100 shares in ABNL will get 30 shares of Grasim and 210 shares of ABFSL. Whereas, a shareholder with 100 shares in Grasim will continue to hold those and will in addition get 700 shares of ABFSL. The "new Grasim" will hold a 57 per cent stake in the separately listed financial services business, while the rest will be held on a proportionate basis by those acquire shares after the merger. The new Grasim will hold a 60 per cent stake in UltraTech, 28 per cent in Idea Cellular and 51 per cent in the solar division.
Aditya Birla Nuvo to merge with Grasim In 2015-16, ABNL posted consolidated revenue of Rs 23,129 crore with a net profit of Rs 1,886 crore, while Grasim Industries' revenue was Rs 36,637 crore with a net profit of Rs 2,359 crore. Last year, the Aditya Birla Group had consolidated its apparel businesses into the then Rs 5,290-crore entity named Aditya Birla Fashion and Retail. Daljeet S Kohli, the head of research, Indianivesh Securities, says, "It is negative for Grasim because it will ultimately become a holding company, which will be saddled with a lot of unproductive businesses such as rayon, fertilisers, and manufacturing that will not add much value. Grasim shareholders will be confused whether they are buying telecom, cement, or which industry. This will lead to re-rating of Grasim." Kohli said for ABNL, the financial services business can add value because that is a fast-growing business. But, value creation will depend on the time of the listing and issue pricing. "For ABNL shareholders, initially, it will be a negative reaction because ultimately it is getting merged, but finally there is the value in financial services. The holding company discount will go away," said Kohli. DSP Merrill Lynch was the sole advisor to Grasim and the companies were valued by Price Waterhouse and Bansi S Mehta & Co. JM Financial and Kotak Mahindra Capital gave fairness opinion. ABNL on Thursday reported a 56.79 per cent decline in consolidated net profit to Rs 305.15 crore in the quarter ended on June. The company had posted a net profit of Rs 706.23 crore a year ago.
SOURCE: The Business Standard
India has begun the process of expanding its preferential trade agreement with the Mercosur trade bloc, opening its market more to South America and negotiations are expected to start in a month or two. The number of products on which tariff concessions is given is likely to increase to more than 3,000 from 450 at present with more agricultural products getting covered in the pact. India, on the other hand, wants to export processed foods and engineering goods to the Mercosur bloc, which comprise Argentina, Brazil, Paraguay and Uruguay. Venezuela, a Mercosur member, is not a party to the agreement. The two sides have been discussing the expansion for a couple of years. The issue also came up at the WTO in March when several countries raised questions about the limited coverage of the pact and if more members could be included in the deal. "The wish lists have been exchanged and industry consultations are on...negotiations may start by October," said an official in the know of the development.
Under the existing agreement, India has reduced import duties on 450 products coming from Mercosur including meat and meat products, organic & inorganic chemicals, dyes, raw hides and skins, leather articles, wool, cotton yarn, glass, articles of iron and steel, machinery items, electrical machinery and equipment. The Mercosur grouping gives tariff concessions on 452 products for India which include food preparations, organic chemicals, pharmaceuticals, essential oils, plastics articles, rubber and rubber products, tools and implements, machinery items, electrical machinery and equipment. The tariff cuts, under the pact signed in 2009, range from 10 per cent to 100 per cent. "We are largely interested in exporting processed foods and electronics to Mercosur. Since pharma is our major export, we need standards. Moreover, economical shipping lines need to be developed to take full benefit of the agreement," said Sachin Chaturvedi, Director General at the Ministry of External Affairs think tank, Research and Information System for Developing Countries.
SOURCE: The Economic Times
Four Special Economic Zone (SEZ) developers including Broadway Integrated Park and Veritas Infrastructure Development have approached the government to surrender their projects. These applications would be considered by the Board of Approval (BoA) headed by Commerce Secretary Rita Teaotia on August 12. The BoA is a 19-member inter-ministerial body that deals with SEZ-related matters. “Formal approval has been granted (to these 4 SEZs) by the department of commerce. However, since there is no significant progress made by the developer, the concerned development commissioners have proposed for cancellation of formal approval granted to the developer,” BoA said in its agenda.
While the two SEZ projects are in IT/ITeS sector, the other two are in the bio technology area. Broadway Integrated Park and Veritas Infrastructure Development had proposed to set up an IT and biotechnology SEZ respectively in Maharashtra. The other two developers who have approached for cancellation of their projects are Muttha Realty and Saloni Business Park. SEZs are export hubs which contribute about 16 per cent to the country’s total outbound shipments. The Commerce Ministry is taking steps to revive investors interest in these zones. It has asked the Finance Ministry to extend sops like rollback or reduction in the minimum alternate tax. Exports from these zones logged a marginal growth of 0.77 per cent to Rs 4.67 lakh crore in 2015-16. It was Rs 4.63 lakh crore in 2014-15.
SOURCE: The Financial Express
Notwithstanding the scepticism over the new gross domestic product (GDP) numbers, India is likely to be the fastest-growing emerging economy till at least the end of the current decade. McKinsey, in a new report, projects India to grow at 7.7 per cent between 2016 and 2020, significantly outpacing other emerging economies. China is expected to grow at 6.4 per cent over the period, while other emerging economies like Brazil and Turkey are likely to grow at 2.2 per cent and 3.3 per cent, respectively. Rapid urbanisation - as McKinsey estimates India to be 41 per cent urbanised by 2030, up from 31 per cent in 2011 - means growth will be driven primarily by cities and satellite towns. According to estimates presented in the report, roughly 77 per cent of India's economic growth between 2012 and 2025 will come from 49 clusters of districts with metropolitan cities at their nucleus.
Achieving these growth rates over a long stretch of time will radically change the size of the economy with some Indian cities reaching the size of the current middle-income countries. Mumbai, for example, will become equivalent to Malaysia of today, representing a massive market opportunity worth $245 billion. Delhi's economy will be equal to that of the Philippines. In fact, Delhi, Ahmedabad, Hyderabad and Bengaluru together will have an annual consumption of $80-$175 billion each by 2030. But as has been pointed out, the report also mentions that sustaining this growth is largely predicated on the degree to which rising urbanisation creates non-farm employment for the ever-growing pool of workers. McKinsey estimates that India needs to create roughly 115 million non-farm jobs over the coming years. Herein lies the problem. Despite the acceleration in growth in the last decade, job creation has been abysmal. Most jobs were created either in low-end construction jobs or in service sectors such as finance, which require a high level of skills. Job creation in the labour-intensive manufacturing sector was negligible. Thus for the millions trapped in the low-productive agricultural sector, avenues to shift were simply not available.
Economists have repeatedly argued that with China moving up the value chain, India is well-positioned to grab a large share of the low end of manufacturing that the country is vacating. As these jobs require relatively low skills, creation of a labour-intensive manufacturing sector would facilitate the shift away from agriculture. But so far, India has failed to take advantage of this with other countries, notably Bangladesh, Cambodia and Vietnam, grabbing a lion's share of manufacturing that is shifting out of China. Also, one must point out that despite rising labour costs, China isn't really vacating low-end manufacturing. The most obvious example being textiles. In 2014, China exported $287 billion worth of textiles - hardly a sign of vacating territory. Add to this, the challenge of increased automation and premature de-industrialisation is a grim reality. While some states - most notably Chhattisgarh, Gujarat, Himachal Pradesh and Jharkhand - have made significant strides in boosting manufacturing, others like Uttar Pradesh, Kerala, Bihar and West Bengal continue to lag. How much the NDA government's Make in India campaign is able to boost domestic manufacturing remains to be seen. But the creation of non-farm employment in itself is not enough to ensure that the millions living in grinding poverty are assured of a decent standard of living. In addition to creating non-farm employment, McKinsey argues that improving nutrition, health and education outcomes, raising public spending on social services in areas such as health care, sanitation and drinking water and more than doubling agricultural growth from the historical average of two per cent to 5.5 per cent is central to helping more than half a billion people cross the threshold of consumption required for an economically empowered life by 2022.
SOURCE: The Business Standard
Democratic presidential nominee Hillary Clinton has reassured her supporters that she would oppose the Trans-Pacific Partnership (TPP) trade agreement if elected president. "I will stop any trade deal that kills jobs or holds down wages, including the Trans-Pacific Partnership," Clinton said during a speech on Thursday in Michigan. "I oppose it now, I'll oppose it after the election and I'll oppose it as president," Clinton said, adding that she would appoint a trade prosecutor to ramp up enforcement of existing trade deals. Clinton's hard line to the TPP came after Republican presidential nominee Donald Trump on Monday attacked her over trade deals. Trump said Clinton "will enact the TPP" if elected president, which he claimed would have a devastating impact on the US auto industry, Xinhua news agency reported. Virginia Governor Terry McAuliffe had also previously said that Clinton would support the TPP deal or seek to renegotiate it if elected president. But John Podesta, chairman of Clinton's presidential campaign, responded at the time that "she is against it before the election and after the election."
Clinton supported the TPP while she was secretary of state, but came out against it after the deal was completed last year. She said the TPP in current form did not meet her "high bar" for creating good American jobs, raising wages and advancing national security. President Barack Obama has vowed to push Congress to approve the TPP deal during the so-called lame-duck session of Congress after the November general election, the final time window before he leaves White House on January 20, 2017. But many lawmakers have cast doubt on a vote for the TPP in the lame-duck session. House Speaker Paul Ryan said last week that the TPP would not get a vote in Congress this year because there was not enough support. "As long as we don't have the votes, I see no point in bringing up an agreement only to defeat it," Ryan said, adding "I have my own problems with TPP, it is not ready, the president has to renegotiate some critical components of it."
The TPP deal involves Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam. It was formally signed by ministers from these 12 countries in February after more than five years of negotiation. The TPP now undergoes a two-year ratification period in which at least six countries, which account for 85% of the combined gross domestic production of the 12 TPP countries, must approve the final text for the deal to be implemented.
SOURCE: The Business Standard
