Indian Economy News

India-US Trade Policy Forum has key role in deepening understanding of each other's positions: Former Obama admin official

Mr. Arun Kumar, who is at the end of his five-year term as Chairman and CEO of KPMG India, in an assignment he took on after completing his tenure as Assistant Secretary of Commerce for Global Markets and Director General of the US and Foreign Commercial Service in the Obama administration stated that the India-US Trade Policy Forum has a key role to play in deepening mutual understanding of each other's positions in a non-negotiating, non-transactional setting.

Ms. Katherine Tai, US Trade Representative (USTR) attended her first Trade Policy Forum (TPF) discussion with India’s Commerce Minister Mr. Piyush Goyal during her first visit to India in November 2021. The meeting was convened after a four-year hiatus.

According to Mr. Kumar, one of the most important aspects of the talks this time was the recognition of the importance of labour and environmental norms. Such issues are now considered necessary components of high-quality trade agreements. Market access for farm products in both ways has improved, with mangoes and pomegranates going to the US and cherries, alfalfa, and pork products going to India. Foreign Direct Investment (FDI) from the US has been strong and increasing in India. Even as the Biden administration was expectedly focused on domestic matters, rumors of a "mini-deal" faded on the government-to-government front.

Mr. Kumar also stated that there are various points of dispute, ranging from the GSP (Generalised System of Preferences) to digital commerce and data issues. The GSP is the US' largest and oldest trade preference programme, promoting economic development by removing tariffs on thousands of products imported from one of 119 selected beneficiary nations and territories. He suggested for more business-to-business interaction, emphasizing the need of export promotion as well as government-led policy advancements. Both the countries have federal structures where the states need to be the engines that drive growth. His recommendation to both the governments would be to prioritize such engagement between states with business leaders working alongside.

Further, he added that for various reasons, the US and India are both bystanders in the Regional Comprehensive Economic Partnership (RCEP) and the Trans-Pacific Partnership (CPTPP). While the Regional Comprehensive Economic Partnership (RCEP) is sponsored by China, the Comprehensive and Progressive Deal for Trans-Pacific Partnership (CPTPP) is a high-standard agreement modelled after the Trans-Pacific Partnership (TPP). Both the US and India have been urged to seriously consider joining the CPTPP. It makes conceptual sense to see a US-India Free Trade Agreement as a first step in that approach.

He also added that the "Quadrilateral Security Dialogue," sometimes known as the "Quad," is a four-nation group made up of India, the US, Australia, and Japan that aims to preserve the Indo-crucial Pacific's water routes free of influence. Studies have shown there is a compelling case for broader economic collaboration among the Quad countries in tariff reduction and market access. A structure like the CPTPP, on the other hand, would be more comprehensive and deserving of consideration to achieve the goals of a bigger free trade area to boost economic growth and jobs in all nations.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.