India, U.S. trade deal falls through

Prime Minister Narendra Modi with US President Donald Trump during a bilateral meeting on the sidelines of the UN General Assembly, in New York on September 24, 2019.

Prime Minister Narendra Modi with US President Donald Trump during a bilateral meeting on the sidelines of the UN General Assembly, in New York on September 24, 2019.   | Photo Credit: Reuters


Prime Minister Narendra Modi, US President Donald Trump talk trade and terror.

Despite Commerce Minister Piyush Goyal’s presence in New York to conclude a trade package with U.S. Trade Representative (USTR) Robert Lighthizer, the two sides failed to bridge the gap in their positions.

The announcement of an agreement was expected to coincide with Tuesday’s bilateral between Prime Minister Narendra Modi and President Donald Trump. “We will have a trade deal soon. We will have a bigger trade deal down the road,” Mr. Trump said before the talks held on the sidelines of the UN General Asssembly meeting.

While Foreign Secretary Vijay Gokhale did not share details on why a trade package could not be concluded, three sources familiar with the negotiations told The Hindu that the prospects of an agreement unravelled due to the failure to reach an agreement on Information and communications technology (ICT) products. The U.S. has wanted India to eliminate tariffs (20%) on ICT products, but New Delhi is concerned that this could open up the market to flooding by Chinese technology.

The U.S. wanted greater access to Indian markets for medical devices, such as stents and knee implants, ICT and dairy products and sought the removal of price caps.

The US had sought the removal of price caps (“Trade Margin Rationalization” or TMR) on medical devices and greater access for dairy products and some other categories of agricultural goods.

On its part, India wanted the reinstatement of preferential market access to U.S. markets under the Generalized System of Preferences (GSP) program, which was revoked in early June. It had also wanted facilitation of processes in agricultural product markets where it already had access (such as easier certification of food product irradiation facilities) and greater access in some agricultural markets (table grapes, pomegranates for instance), sources told The Hindu.

Although a limited trade package could not be finalised, Mr. Gokhale said the two sides had “narrowed their areas of difference”, and made “significant progress”.

“The two leaders, therefore, felt that they were optimistic in terms of reaching some kind of a trade agreement in the near future. And discussions will continue in this regard,” he said. However, he did not provide a time frame for the conclusion of agreement.

“It appears there was no trade deal and that’s disappointing. Hopefully the two sides will keep engaging and not let momentum dissipate,” Mark Linscott, former senior USTR negotiator and now senior fellow at the Atlantic Council told The Hindu.

“Frankly it’s not a good sign that a modest deal could not get done because there are bigger issues down the road. If India and the U.S. are going to realize the full potential of the trade relationship, they need to start putting points on the board,” Mr Linscott said.

Some of the larger issues for the U.S. include digital trade (for instance regulations around data localization and FDI in e-commerce). India also continued to appear on U.S.’s  “Priority Watch List” this year along with 10 other countries. The annual list identifies countries which, according to the U.S., pose challenges to American intellectual property rights. 

Modi, Trump discuss terror and trade

Mr Modi and Mr Trump discussed trade and terrorism during their bilateral meeting which lasted for about 40 minutes, Mr. Gokhale said.

Mr. Modi had a 13 member delegation (as per a White House pool report)  including External Affairs Minister S Jaishankar, Commerce Minister Piyush Goyal, Mr Gokhale and Indian Ambassador to the U.S., Harsh Shringla.

“We believe that we have given a good understanding to the U.S. side about the challenges that we face on the count of terrorism in India, including in Jammu & Kashmir,” the Foreign Secretary said.

Answering questions from the media prior to their bilateral meeting at the UN building, President Trump urged Prime Minister Modi and Pakistan Premier Imran Khan to meet for a “good outcome” on Kashmir.

“As Prime Minister Modi and Prime Minister Khan meet and get to know each other, a lot of fruitful and peaceful things can be expected,” Mr Trump said.

His comments reiterated his remarks on Monday during his meeting with Mr. Khan when he had asked both India and Pakistan to hold talks.

Despite repeated questions, President Trump, however, remained non-committal about targeting cross border terrorism from Pakistan and said, “You have a great Prime Minister and he will take care of that.”

‘Father of India’

On his experience at the “Howdy, Modi!” diaspora event, U.S. President Donald Trump said, “They love this gentleman to my right. People went crazy, he [Narendra Modi] is like an American version of Elvis.” 

“I remember India before was very torn. There was a lot of dissension, fighting and he brought it all together. Like a father would. Maybe, he is the Father of India,” he added. 

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Printable version | Jan 30, 2020 1:39:55 AM |

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