In preparations for discussions with USTR Brendan Lynch, GTRI advises India to concentrate on industrial goods tariffs, aiming to eliminate 90% if the US reciprocates. Other trade aspects, notably intellectual property and agricultural tariffs, should remain off the table. The absence of FTAA in the US poses risks of unpredictable changes after any agreement is reached.
During the forthcoming discussions with Assistant US Trade Representative Brendan Lynch, India is advised to prioritize negotiations solely on industrial goods tariffs, according to the Global Trade Research Institute (GTRI). Lynch, accompanied by US government officials, is visiting India for five days, initiating talks regarding the bilateral trade agreement (BTA), with hopes to finalize the initial terms by fall 2025.
GTRI has proposed that India consider the elimination of tariffs on 90 percent of industrial tariff lines, provided that the United States reciprocates. This recommendation is intended to affect over 90 percent of bilateral merchandise trade between India and the US. Furthermore, GTRI cautioned India against entering discussions on intellectual property, digital trade, agricultural tariffs, subsidies, or government procurement, as these could pose risks to national security and compromise local businesses.
India previously attempted to address issues raised by US President Trump regarding tariffs by reducing customs duties on several American products, including bourbon whiskey, in its February 1 Union Budget. However, GTRI noted that these good-faith measures have not been recognized by the US side.
Additionally, GTRI emphasized the need for caution while negotiating the BTA, particularly due to the absence of Fast Track Trade Authority (FTAA) in the US. FTAA allows the President to expedite trade agreements, but without it, any agreement remains susceptible to shifts in Congressional priorities. This uncertainty could lead to new demands or alterations post-agreement by the US.
The report cautioned that the lack of FTAA exposes finalized agreements to unpredictable legislative changes, emphasizing that upcoming negotiations will require not only diplomatic acumen but also awareness of the potential legal disparities inherent in American trade policies.
In conclusion, the Indian government faces significant strategic choices in upcoming trade talks with the US. By focusing discussions solely on industrial goods tariffs and carefully avoiding issues such as intellectual property and agriculture, India can work towards a beneficial agreement. Moreover, understanding the implications of the absence of FTAA will be crucial in navigating the uncertainties that may arise from US legislative interventions following the agreement’s completion.
Original Source: www.business-standard.com
