Atman Trivedi on U.S.-India Trade Summit
In written comments for the Atlantic Council South Asia Center, ASG's Atman Trivedi encourages observers to temper their expectations for substantive outcomes in the first U.S.-India meeting of the Trade Policy Forum since its discontinuance in 2017. Click here to read the full article.
"The United States and India are set to resume the Trade Policy Forum (TPF) after a four-year hiatus. The Biden administration’s decision to relaunch the TPF signals a welcome departure from its predecessor’s confrontational approach to trade. It comes as the White House tries to convey to Asian leaders its plans for a robust economic and trade engagement that is competitive with China’s regional approach.
While the talks should be cordial and constructive, US-India trade discussions are typically complicated by different histories, national economic circumstances, and ideology—and this session won’t be any different. The face-to-face meeting in New Delhi will allow the leaders to get to know each other, understand each other’s priorities, and finalize a common agenda for two-way negotiations.
The Biden and Modi administrations are each focused on attracting manufacturing and winning the support of workers. India has recently attempted to reinvigorate trade talks with a number of countries as part of a renewed effort to spur export-led growth and employment. But USTR is reluctant to conclude a trade 'mini-deal' that was being finalized last year but ultimately ran out of time.
Expectations for TPF 'deliverables' should be rather modest as conversations are still in the early stages. Likely the most that can be expected is limited tariff reductions on both sides and perhaps slightly greater US market access on agriculture. Reduced trade barriers won’t be a feature of this TPF, as GSP reinstatement—a significant inducement for India—can’t be offered until Congress reauthorizes the program.
USTR is keen to talk about India’s digital, labor, and environmental policies. But each of these issues likely presents difficulties for the Modi government. India’s so-called equalization levy on digital services could be subject to US tariffs that enter into effect on November 29 if an agreement cannot be reached by the two countries in the next couple weeks. Substantive discussions on intellectual property are a comparative bright spot where the sides could conceivably be ready to announce progress."