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TWN Info
Service on WTO and Trade Issues (Mar20/01) US, India
can conclude "comprehensive" deal by year-end, says Trump Geneva, 26 Feb (D. Ravi Kanth) -- The United States and India can conclude a "comprehensive trade agreement" by the end of the year, President Donald Trump declared at the end of his two-day visit to India on Tuesday (25 February). Notwithstanding the numerous concerns over an unequal bargain and asymmetrical provisions that would heavily tilt the proposed comprehensive trade deal in favour of Washington, the US President and the Indian Prime Minister Narendra Modi remained overly optimistic for concluding a deal by the end of the year. The two leaders, according to the White House, agreed to "promptly" conclude negotiations on the smaller package that the US and India have been working on since last year. That small deal could constitute Phase I of the US-India bilateral trade agreement reflecting "the true ambition and full potential of the bilateral commercial relations, advancing prosperity, investment, and job creation in both countries," the White House suggested on 25 February. During an appearance with Prime Minister Modi, the US President said that the two sides are almost on the verge of a limited package involving market access as well as other provisions, including sanitary and phytosanitary regulations. "We are confident that this will yield good results that will be in our mutual interests," President Trump claimed. As a sign of the success of his maiden visit to India, President Trump prophesied that the bilateral relations between the US and India will be significantly transformed in the coming years, and said that "India has a phenomenal future, especially with PM Modi." "India is going to be a major player in next 50 to 100 years [and] India is going to have a phenomenal future," he repeatedly said at his press conference on Tuesday. Despite his effusive praise about India and Prime Minister Modi, whom he described as a "tough negotiator", President Trump went on to complain repeatedly that "India has charged us a large number of tariffs and that is not acceptable." He cited the example of Harley-Davidson, again saying that India charged high tariffs while the US allows Indian products to enter the American market at very low tariffs. "India has the highest tariffs. Harley-Davidson tariffs are unfair and we are working on it," President Trump said. Expressing confidence that a comprehensive trade deal will be concluded by the end of the year, President Trump said "no one thought we could do a deal with China, but now we do. India has the highest tariffs." "If the trade deal happens with India, it will happen towards the end of the year," he added. According to sources familiar with the ongoing bilateral talks, Washington has demanded substantial market access for agricultural products, including dairy and poultry products, pharmaceutical items such as stents, and comprehensive regulatory changes involving electronic commerce and removal of data-localization provisions. However, Washington was unwilling to restore the GSP (Generalized System of Preferences) benefits accruing to Indian exporters that were terminated unilaterally by the Trump administration last year. "It is appropriate to terminate India's designation as a beneficiary developing country (under the GSP scheme) effective June 5, 2019," because India failed to provide reciprocal market access, it said. Although the US administration's action violated the World Trade Organization's Enabling Clause, which unambiguously stated that schemes by preference-giving developed countries such as the US must remain a "generalized, non-reciprocal, non-discriminatory system of preferences in favour of the developing countries." To rectify its illegal trade-related actions, the US demanded that India should remove the retaliatory duties it imposed in the wake of additional duties imposed by the US on steel and aluminum under the US Section 232 national security provisions. Commenting on the steel tariffs, President Trump said the steel tariffs had revived the domestic steel industry. The US President referred wrongly to his meeting with the Mittal Group as one "Mr Patel", saying that the group is setting up "a steel plant in Alabama and is investing billions of dollars in the US." "He [Mittal] is spending the money because of my policies," he said. He claimed that he will win the coming elections, adding that "when we win, markets will go up." "Markets will jump thousands of points when I win," he added. President Trump also held a roundtable with several leading Indian industrialists such as Reliance Industries Chairman Mukesh Ambani, Mahindra Group Chairman Anand Mahindra, Tata Sons Chairman N Chandrasekaran and Aditya Birla Group Chairman Kumar Mangalam Birla. President Trump and PM Modi have signed memorandums of understanding (MoUs) on mental health and medical products. They also signed a Letter of Cooperation between IOC (Indian Oil Corporation) and ExxonMobil. In the last four years, India-US energy trade has been worth $20 billion. In the last three years, a $70 billion deal in defence aviation and technology has been conducted. It remains to be seen whether the proposed Indo-US comprehensive trade agreement will influence New Delhi's positions against the US decisions to bring about differentiation among developing countries for availing special and differential flexibilities in the current and future trade negotiations, transforming the WTO into an organization based solely on market-guided reforms, and allow the WTO to function with its vital adjudicating mechanism. +
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