Picking up the trade thread in Indo-US ties

India and the United States (US) quietly brought down the curtain in recent days on nearly two years of intense trade talks that had brought the two countries the closest to an agreement in years. They can be called the Trump Round of talks for US President Donald Trump’s unmistakable imprint on them, from start to finish.

External affairs minister S Jaishankar signaled India had moved on when he said, last Sunday at a FICCI event, that he hoped to have “very serious discussions” with the incoming administration of President-elect Joe Biden.

And Robert Lighthizer, the top US trade representative (USTR), who participated at a CII event virtually on Wednesday, referring to the fate of a deal he had been involved in personally for months, said, “There is going to be some change (new administration), and my guess is that is going to slow things up.”

This was the closest the two countries had come to a trade deal, howsoever small or large. “We’re not that far away from a deal,” Lighthizer said. Piyush Goyal, his Indian counterpart, had said at one stage that a deal was “just a few phone-calls away”.

So, what went wrong?

The two sides had given themselves a modest target for a deal, relative to the vast and complex wishlist on China. India blames the US, accusing it of inflating demands — “changing the goalpost”. New Delhi sought the restoration of special trading benefits under the Generalized System of Preferences, which allowed Indian exports worth more than $6 billion to enter the US duty free. Trump had terminated it in May, 2019, just two days after Prime Minister Narendra Modi had started his second term, to ratchet up pressure on India.

The US wanted, in return, greater market access to Indian agriculture and dairy and freeing medical devices such as heart stents and knee replacements from price control. It raised concerns about new Indian regulatory announcements on the digital economy but was not willing to break talks over them. Lighthizer, on his part, had seemed particularly frustrated about Indian bureaucracy in his recent remarks to the trade body but it was not clear if he held them responsible.

As India waits to engage the incoming Biden administration, it also wants to make it clear, as Jaishankar indicted, it is eager for a trade deal more than ever before — a sign the Trump administration either missed or sought to leverage to win more concessions. New Delhi does not want trade to be a drag on the relationship, which is on the upswing in every other aspect, particularly defence.

India is looking forward to working with Katherine Tai, the incoming USTR if confirmed by the US senate, who is an old hand. She served at the USTR office before and was the chief trade consul to a powerful congressional committee.

Tom Vilsack, the agriculture secretary who returns to the job for a third term, will be a key player in the talks as well, given the growing importance of agriculture as a trade issue.

Yashwant.raj@hindustantimes.com

The views expressed are personal