Trump’s trade at­tack pushes In­dia to ne­go­ti­at­ing ta­ble

Daily Mirror (Sri Lanka) - - POINT OF VIEW - ar­chana chaud­hary, shruti BY sri­vas­tava (c) 2019, Bloomberg · Jun 03, 2019 -

In­dia plans to re­turn to the ne­go­ti­at­ing ta­ble after Pres­i­dent Don­ald Trump ter­mi­nated a trade con­ces­sion that al­lowed the coun­try to ex­port al­most 2,000 prod­ucts to the U.S. duty-free, peo­ple with knowl­edge of the mat­ter said.

While an op­tion is to raise tar­iffs on a slew of U.S. goods as re­tal­i­a­tion, In­dia may not choose that con­sid­er­ing the ben­e­fits with­drawn by Trump were not man­dated by any global pact and were of­fered vol­un­tar­ily by Wash­ing­ton, said the peo­ple who asked not to be iden­ti­fied, as they aren’t au­tho­rized to speak to the me­dia. Any counter tar­iff mea­sures could fall foul of World Trade Or­ga­ni­za­tion norms.

The mat­ter would be dis­cussed when Piyush Goyal, In­dia’s new trade min­is­ter, meets lo­cal of­fi­cials and trade bod­ies on June 6, the peo­ple said. In­dia’s com­merce min­istry spokes­woman Monideepa Mukher­jee de­clined to com­ment.

In­dia last year an­nounced higher tar­iffs on a clutch of items in re­tal­i­a­tion to U.S. im­pos­ing higher levies on some prod­ucts shipped from the South Asian na­tion, mir­ror­ing steps taken by China and the Euro­pean Union. New Delhi, how­ever, re­peat­edly de­ferred im­po­si­tion of the new tar­iffs as it kept the door open for talks to avert a trade war.

Trump’s move ends trade con­ces­sion to $5.7 bil­lion of goods that In­dia shipped to the U.S. as of 2017. These in­clude im­i­ta­tion jew­elry, leather goods, phar­ma­ceu­ti­cals, chem­i­cal and plas­tics and some farm items.

The U.S. has sep­a­rately called for In­dia to re­move what Com­merce Sec­re­tary Wil­bur Ross last month de­scribed as “un­favourable treat­ment” to U.S. com­pa­nies and an im­bal­ance in In­dia-u.s. trade.

In­dia’s in­abil­ity to ratchet up the trade dis­pute stems from its in­creas­ing reliance on the U.S. for de­fence equip­ment purchases as part of a strate­gic part­ner­ship. The U.S. has been spear­head­ing a group­ing of na­tions in­clud­ing In­dia, Aus­tralia and Ja­pan as part of its pol­icy to con­tain China’s grow­ing eco­nomic and mil­i­tary might in Asia.

“Given the ris­ing tempo of U.S.In­dia strate­gic ties on mat­ters chiefly per­tain­ing to de­fence in­ter-op­er­abil­ity, In­dia may take a tem­pered ap­proach,” said Kashish Parpi­ani, fel­low at Observer Re­search Foun­da­tion, a pri­vate think-tank. The U.S.’S arms ex­ports to In­dia rose by over 550% in the five years to 2017, mak­ing it In­dia’s se­cond-largest arms sup­plier, Parpi­ani said.

In­dia, which on its part tried to re­duce the $21 bil­lion trade sur­plus with the U.S. by step­ping up im­ports from Amer­ica, termed the with­drawal of ben­e­fits as “un­for­tu­nate.” While the coun­try will con­tinue to work on im­prov­ing ties with the U.S., its trade de­ci­sions would be guided by its own “de­vel­op­ment imperative­s and con­cerns,” In­dia’s trade min­istry said in a state­ment last week.(bloomberg)

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