US, India Look to Next Steps in Trade, Economic Relationship

2 November 2017

US and Indian officials debated ways to improve market access, address the movement of skilled professionals, and deepen their overall economic and trading ties last week during the Trade Policy Forum in Washington.

However, the meeting did not lead to a joint statement nor the announcement of new deliverables, with officials from both sides releasing respective statements noting areas where they hope to see future concessions from their trading partners.

The 26 October event brought together commerce, trade, and foreign affairs officials from both sides. Discussions under this forum are held annually, with last week’s meet being the first under the new administration of US President Donald Trump.

Over the past dozen years, bilateral trade between the two economic powerhouses has tripled, according to US statistics. Data from the Office of the US Trade Representative places bilateral goods and services trade at US$114.8 billion last year alone. Among the top goods traded between them are medical devices and pharmaceuticals, precious stones, minerals, and machinery.

Within the services sector, travel and telecommunications are listed as topping bilateral trade between Washington and New Delhi.

Trade deficits, movement of workers

Since taking office in January, the new US administration has placed a significant focus on addressing trade deficits with major partners, along with calling for rectifying purported trade imbalances to enable more “reciprocal” trading relationships.

The approach has fuelled concern in international trade policy circles, as officials from many US trading partners have argued in different contexts that trade deficits in themselves are not sufficient measures for qualifying the nature of economic relationships.

The trade deficit subject was reportedly raised by Washington officials last week, with US Trade Representative Robert Lighthizer noting that his country currently holds a US$29.6 billion trade deficit with the South Asian country.

“Our work under the Trade Policy Forum focused on achieving progress towards a more balanced trade relationship,” said Lighthizer in a statement following the meet. “To increase reciprocal trade, we will continue to seek to identify and address trade barriers related to goods, including manufactured and agriculture, services, and intellectual property rights.”

The USTR statement also noted that while discussions between both sides tackled areas ranging from tariff and non-tariff barriers to intellectual property rights enforcement, which have long been the subject of trade discussions between Washington and New Delhi, the two nations “had differing views that could not be resolved immediately” when it came to many of the topics tabled in Washington last week.

Meanwhile, India’s trade officials said following the meet that while talks were “positive,” they questioned the trade deficit focus of Washington’s approach.

“On the United States concerns related to trade deficit with India, the Minister of Commerce and Industry pointed out that the issue of trade deficit should be viewed in the larger context of the growing economic and strategic partnership between the two countries that has grown and strengthened in recent years,” said a statement published by the Indian ministry.

The Indian Commerce and Industry Minister is currently Shri Suresh Prabhu, who met with both Lighthizer and with US Commerce Secretary Wilbur Ross last week. The Indian official also flagged some recent policy changes that have enabled greater energy imports from the US, along with various purchases of US-made aircraft and recent efforts by India to address the US’ intellectual property rights concerns.

However, both Prabhu and Indian External Affairs Minister Sushma Swaraj raised in separate meetings with their US counterparts their concerns over the US visa regime for skilled workers, including potential changes under consideration by Washington lawmakers that could make it harder for Indian skilled professionals to work in the North American nation.  

Another topic reportedly raised in the discussions was the upcoming WTO ministerial conference in Buenos Aires, Argentina, according to the Indian commerce ministry statement. That meeting is set for 10-13 December, with negotiators in Geneva working to advance a set of deliverables for the high-level event, along with agreeing on which areas should be the subject of future work in the short term. (See Bridges Weekly, 26 October 2017)

Indian officials raised their proposal on a trade facilitation accord in services, the statement said, advocating for the US to back the suggested approach. Statements from Washington officials did not refer to the WTO discussions, though the US has said in recent months that it is not expecting major negotiated outcomes in Buenos Aires.

ICTSD reporting.

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