During her first visit to India last month, U.S. Trade Representative (USTR) Katherine Tai had her first Trade Policy Forum (TPF) meeting with Minister of Commerce Piyush Goyal. The meeting took place after a four-year hiatus.
“I view the engagement as positive. It was important that face-to-face conversations at ministerial level took place between the two governments,” said Arun Kumar, who is coming to the end of his five-year term as Minister. as Chairman and CEO of KPMG India. , a mission he took on after completing his tenure as Assistant Secretary of Commerce for Global Markets and Managing Director of the U.S. and Foreign Trade Service in the Obama administration.
âThe Trade Policy Forum met after four years. I had the privilege of attending the Forum when I was in the Obama administration. I think it is a valuable platform for a constructive discussion. It has a key role to play in deepening everyone’s understanding of each other’s positions in a non-negotiation and transactional setting, âKumar told PTI in a recent interview.
Kumar, who was in Washington DC on a personal visit, said an important aspect of the talks this time around is that they have recognized the importance of labor and environmental standards.
âSuch matters are today considered essential elements of high quality trade agreements. On more specific issues, progress has been made on market access for agricultural products back and forth, mangoes and pomegranates to the United States, and cherries, alfalfa and pork products. to India, “he said.
Responding to a question about the 11 months of the Biden administration, Kumar said the good news is that trade and commerce between the United States and India continues to grow. The United States is now India’s largest trading partner, Kumar noted.
Foreign direct investment (FDI) from the United States to India has been strong and growing. On the government-to-government front, talks of a “mini-deal” have receded even as the Biden administration was supposed to focus on national priorities, he said.
“Ambassador Katherine Tie’s visit should be seen as a step towards building a forward movement on the political front. The visit follows the meeting of President (Joe) Biden and Prime Minister (Narendra) Modi at the White House in September which, alongside the Quad Leaders Meeting, focused on security, global health and climate change.
“The engagement on trade, coming within two months of the leaders meeting, is a signal of the importance of the economic partnership,” Kumar said.
According to Kumar, there are several areas of contention ranging from Generalized System of Preferences (GSP) to trade-related issues and digital data.
âThe most important thing, in my opinion, is to solve the problems related to the digital economy as the world moves at an increasing pace towards e-commerce, including digital payments. Finding the right answers will mean a lot for both economies, allowing access to larger markets and creating more jobs, âhe said.
The GSP is the United States’ largest and oldest trade preference program, which promotes economic development by eliminating tariffs on thousands of products when imported from any of 119 designated beneficiary countries and territories. .
Kumar, in response to a question, suggested greater business-to-business engagement, prioritizing export promotion as much as government-led policy advances.
“Such engagement should be energized at the sub-national level, with US state governors and Indian chief ministers in the lead. We have successful examples in both countries where a dynamic head of state has made demonstrable differences through his initiatives and its targeted engagement, “he said. noted.
âThe United States and India have federal structures where states are to be the engines of growth. My recommendation to both governments would be to prioritize such interstate engagement with business leaders working alongside “Kumar added.
Observing that the topography of world trade has changed in many ways over the past five years, he said the world would hopefully emerge from isolationist tendencies marked by Brexit and the postures of the Trump administration.
âWe see regional multilateral groupings, the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) making progress – albeit unevenly. Modern supply chains wind through several countries; increasing the importance of multilateral approaches, âKumar said.
âThe importance of supply chain resilience was highlighted by trade issues between the United States and China and then exacerbated by the pandemic. carbon negative, the quality and monitoring of supply chains for their environmental impact are becoming even more important, âhe added.
The United States and India are both spectators when it comes to the Regional Comprehensive Economic Partnership (RCEP) and CPTPP, for different reasons. While the RCEP is a China-led configuration, the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP) is a relatively high-level agreement modeled on the Trans-Pacific Partnership (TPP), Kumar noted.
âIt has been suggested that the United States and India should actively consider joining the CPTPP. As a step in that direction, it conceptually makes sense to envision a free trade agreement between the United States and India. The North American Free Trade Agreement (NAFTA) was a stepping stone to the old TPP, then the CPTPP. NAFTA was of course replaced by the United States-Mexico-Canada Agreement (USMCA) because NAFTA, after more than 25 years, needed updating, âhe said.
âTrade deals are not easy to make. They are very difficult politically in democracies; while the goal is for the global economy to benefit, there will be local losers who would need to be helped, âKumar said.
While the Quad is in principle a safety-focused group, it’s encouraging to see it also become a platform for conversation in areas spanning healthcare, technology and finance, he said.
Known as the “Quadrilateral Security Dialogue,” Quad is a bloc of four countries comprising India, the United States, Australia and Japan that strives to maintain critical Indo- sea routes. Pacific free from all influence.
âStudies have shown that there is a compelling case for broader economic collaboration between Quad countries on tariff reduction and market access. Likewise, a structure like the CPTPP would be more comprehensive and merit consideration to achieve the goals of a larger free trade area in order to develop economic growth and jobs in all countries, âKumar said.