As new government has taken charge in India, the Obama administration has an opportunity to revitalise its economic ties with India by the latter’s inclusion in the Asia-Pacific Economic Cooperation (APEC) forum, a top American think-tank has said.
A new policy innovation memorandum, authored by Alyssa Ayres of the Council on Foreign Relations (CFR) explains that economic ties between the two countries have soured, and remain well below potential.
India has been waiting nearly 20 years to join APEC, and further delay “is both a strategic and tactical mistake”, she noted.
An India within APEC would likely ameliorate some concerns about U.S.-India economic ties today, asserted Ms. Ayers, who served in the South and Central Asia Bureau of the State Department for several year, before joining CFR.
Entry would also affect India’s commitments to free and open trade, and build confidence for considering Indian membership in the Trans-Pacific Partnership, she said.
Including Asia’s second-fastest growing economy, “a colossus in its own right”, far outweighs any potential losses.
Without India, the forum cannot represent the Asia-Pacific economy, Ms. Ayres said.
In her policy paper, Ms. Ayers argued that an India within APEC-responsible for upholding its commitments-would likely ameliorate some of the market-access concerns troubling U.S.-India economic ties.
APEC’s technical groups, which align with several of the areas of U.S.-India friction, hold expert-level consultations within the multilateral framework.
With its “green goods” goal, APEC’s energy working group promotes eliminating barriers in clean energy trade and services, such as the removal of local content requirements, a live issue between the United States and India, she said.
“All APEC member economies craft annual action plans toward APEC’s Osaka Action Agenda goals of ‘free and open trade and investment’, covering tariffs, nontariff barriers, services, investment, standards, intellectual property rights, and other issues,” she wrote.
“Member economies peer review action plans. India would reject such a transparency exercise bilaterally, but it prizes the role of multilateral institutions and seeks to uphold the norms of those in which it is part.
Its relationships with such institutions do not provoke concerns about strategic autonomy in the way that bilateral relationships sometimes do.
“For this reason alone, APEC would provide a substantial assist to managing bilateral frictions, complementing the adversarial approaches inherent to the WTO,” the CFR scholar said.
Ms. Ayers said successfully championing India’s bid for APEC membership will require deft diplomacy.
As the US government’s lead agency for APEC, the Department of State should coordinate support for India’s membership bid and commit to working closely with India, she said.
“To be most effective and sensitive to India’s needs, Washington and New Delhi should be fully aligned on strategy, process, and talking points at all times. The Secretary of State should call his counterpart with the proposal, as a sign of the importance the US government places on one of India’s long-standing goals,” she added.
In coordination with India, the United States should convey U.S. support for India’s bid for APEC membership to the host country.
She urged the Obama Administration to instruct U.S. ambassadors in all APEC member economies and aspirants to convey the U.S. decision to support India’s bid.
The East Asia, Europe, and Western Hemisphere bureaus in the State Department should mobilise support from all current APEC member economies, informing aspirants subsequently, she said.
Identifying champions of Indian membership will help advance the bid, she said.
“The State Department should consult the APEC Business Advisory Council (ABAC) on India, given Indian businesses’ participation in ABAC’s chief executive summit,” she said.
