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The Trade Policy Forum (TPF) for Indo-US trade policy (estd. 2005) is co-chaired by India’s Minister of Commerce and Industry Minister Piyush Goyal, and the United States Trade Representative Katherine Tai, with the primary function to work for expanding bilateral trade and investment between the two biggest economies of the world.
The impending trade policy between India and the US will be targeted towards generating sustainable economic growth, and improving the business and investment climate between the two nations.
Recently, the 13th ministerial level meeting of the US India Trade Policy Forum was held in Washington, DC, as Goyal was on an official trip to the States. Even though there was a mutual sentiment to further enhance trade engagement between India and the US, largely the Forum is yet to materialise the potential virtues of a solid Indo-US trade policy. The previous TPF meeting was held in New Delhi in November 2021.
According to experts, if the United States could offer the reinstatement of India’s Generalised System of Preferences program benefits, the prospects are strong that the two sides could reach an agreement on a series of issues, covering agriculture, health-sector products, digital services, and new trade issues.
Another factor that is preventing the trade agreement from being solidified is the Biden government’s ‘allergy to negotiate FTAs’. Well placed sources say that it is preventing the States from competing in global markets. As a result, the US’ trading partners are negotiating trade agreements between themselves. For instance, India concluded its FTA with UAE, an interim FTA with Australia and is in successful negotiations with UK, EU and Canada. In the long run, this seriously hampers the interests of the US export fraternity.
It should be noted that it is not only merchandise EXIM activity that gets affected for both the parties, but also a lot of opportunities lost in terms of exchange of digital trade.
Stakeholders had expected the TPF meeting to result in ‘short, tangible’ outcomes as both countries habitually enter trade discussions from different vantage points that reflect starkly different economic circumstances, traditions, and systems.
During the 13th meeting of the TPF, both the Ministers highlighted the work undertaken through the TPF working groups since the 12th meeting. The United States welcomed India’s participation in the Indo-Pacific Economic Framework for Prosperity (IPEF). Both Tai and Goyal expressed their shared intention to continue to work constructively at the WTO to achieve tangible, realistic, and meaningful outcomes. Ambassador Tai welcomed India’s G20 Presidency and said the United States looks forward to working together in the Trade and Investment Working Group.
Coming to the bilateral trade issues, they continue to remain unresolved, further delaying the policy. The Ministers expressed their intent to continue to work together on resolving outstanding trade issues and highlighted upcoming engagement on a select number of those issues.
In a positive move, reflecting their shared objective of deepening and broadening the U.S.-India trade relationship, the Ministers launched a new TPF Working Group on Resilient Trade. This new Working Group will enable officials to deepen bilateral dialogue on a range of issues that can enhance the resiliency and sustainability of the trade relationship so that it is better able to withstand current and future global challenges.
The Ministers concluded by directing the TPF Working Groups to reconvene quarterly, either in person or virtually, and identify specific trade outcomes to ensure that trade relationship begins to reach its full potential. They also instructed senior officials to hold an inter-sessional TPF meeting by mid-2023 and agreed to reconvene the TPF at the Ministerial level before the end of 2023.
(With inputs from PTI)
