The recently convened Trade Policy Forum (TPF) between India and the United States is back in the news after a gap of four years. Both countries are dedicated to escalating their economic ties by resolving outstanding market access issues and targeting tariff reductions. This article delves into the significant points of the forum, its primary aims and the steps both nations can take to strengthen their ties.
Trade Policy Forum: Aims and Objectives
The foremost aim of the TPF is to activate its working groups that focus on agriculture, non-agriculture goods, services, investment, and intellectual property. These groups aim to convene routinely to address issues of mutual concern in a way that is beneficial for both the United States and India. The ultimate objective is to provide measurable benefits by resolving pending market access issues.
Key Decisions Made at the Forum
Several crucial decisions were made during the forum. One of the significant highlights includes mutual market access. Both nations decided to forge an agreement that would facilitate market access from India to the U.S., and vice versa, specifically focusing on agricultural and animal products.
Another key decision was India’s request for the restoration of the Generalized System of Preferences (GSP) benefits by the U.S. The forum also recognized the importance of a Social Security Totalisation Agreement, which would prevent duplicate social security contributions and allow workers to move their retirement savings.
Engagement in Rules-based Global Trading System
India and the U.S. have shown interest in engaging with various multilateral trade bodies, including the World Trade Organisation (WTO) and the G20. Their aim is to achieve a shared vision of a transparent, rules-based global trading system among economies and democracies. They also acknowledged the need to find mutually agreed solutions for standing WTO disputes.
Ethanol Supply, Pharma Cooperation, and Services Front
The U.S. has expressed interest in supplying ethanol to India for its goal of 20% ethanol blending with petrol by 2025. Both nations also agreed to partner with allies to develop a secure pharmaceutical manufacturing base, de-risk global supply chains in health sectors, and facilitate growth in legal, nursing and accountancy services.
Importance of Critical Technologies and Addressing Climate Change
Both countries understand the significance of critical technologies like cyberspace, semiconductors, Artificial Intelligence, 5G, and future generation telecommunications technology. They also discussed ways to increase the utilization of renewable energy for achieving net-zero emissions, as stated in the India-US Climate and Clean Energy Agenda 2030 Partnership.
Steps Towards Trade Enhancement
One proposal suggested that India could unilaterally remove its retaliatory tariffs, proving itself as a constructive player in trade talks. This act of good faith might contribute to a favourable bilateral trade relationship. Another strategy is deepening trade ties with partners who are dedicated to supporting India’s growth, effectively countering China’s influence.
Fostering Digital Growth
To further propel growth in the digital sphere, both countries need to address several foundational issues like the digital service tax, cross-border data flows and common cellular standards. Aligning India’s stance on the digital services tax with emerging global agreements will provide a significant boost to trade.
