The Indo-American Trade Policy Forum has a key role to play in deepening understanding of each other’s positions in a non-negotiating and non-transactional framework, according to a former senior trade official in the Obama administration, who spoke welcomed the revival of the key platform to further strengthen bilateral trade relations.
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 see 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 Chairman and CEO of KPMG India, a mission that ‘he assumed after completing his post as Assistant Secretary of Commerce for Global Markets and Managing Director of the US and Foreign Trade Service in the Obama administration.
The 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. He has a key role to play in deepening understanding of each other’s positions in a non-negotiation and transactional setting, Kumar 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.
These subjects are now 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 products from the United States. pork 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 India’s largest trading partner today, Kumar noted.
US foreign direct investment (FDI) in India has been robust 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 creating a movement forward on the political front. The visit follows President (Joe) Biden and Prime Minister (Narendra) Modi’s White House meeting 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.
The most important, in my opinion, is to solve the problems related to the digital economy as the world moves at an increasing rate towards e-commerce, including digital payments. Finding the right answers will mean a lot to both economies, allowing access to larger markets and creating more jobs, he 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 subnational level, with US state governors and Indian chief ministers in the lead. We have success stories in both countries where a dynamic head of state has made demonstrable differences through his initiatives and focused engagement, he said.
The United States and India both have federal structures where states are to be the engines of growth. My recommendation to both governments would be to prioritize such engagement between states 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.
We 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, Kumar said.
The importance of supply chain resilience was highlighted by trade issues between the United States and China and then exacerbated by the pandemic. Over-reliance on a single geographic area is clearly unwise. In addition, as countries and companies aim to become carbon neutral or carbon negative, the quality and monitoring of supply chains for their environmental impact takes on even greater importance, he 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 setup, the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP) is a relatively high-quality agreement modeled on the Trans-Pacific Partnership (TPP), Kumar noted.
It was 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), as NAFTA, after more than 25 years, needed updating, he said.
Trade 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, Kumar 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 nations comprising India, the United States, Australia and Japan that strives to maintain critical Indo-sea routes. Pacific free from all influence.
Studies have shown that there is a compelling case for broader economic collaboration among Quad countries on tariff reduction and market access. Likewise, a structure like the CPTPP would be more comprehensive and would deserve to be taken into consideration in order to achieve the objectives of a wider free trade area in order to increase economic growth and employment in all countries, a said Kumar.
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