With the re-appearance of Indian mangoes in the U.S. market, after the November 2021 U.S. India Trade Policy Forum (TPF) helped overcome a pandemic-induced hiatus in mango trade, officials are looking at what can be achieved at this year’s TPF session, likely to be held in November. For the U.S., exporting ethanol and an associated animal feed ingredient, called DDGS (Distillers’ Dried Grains with Solubles) to India, is important, in the agricultural goods category, a U.S. government official told The Hindu.
As far as ethanol trade is concerned, the U.S. official said they were aware that India had “ some sensitives” given it has domestic ethanol producers, and that the U.S. could find a way to supplement these sources, to help with renewable energy goals, even if that meant not fully liberalising the market for ethanol. India amended the National Policy on Biofuels in May to advance the 20% ethanol blending target in petrol by five years , to 2025-26. The amended policy also allows the greater use of feedstock for biofuels.
For India, the export of carabeef (water buffalo meat) to the U.S., as well as table grapes are among the agricultural trade priorities currently under discussion, the official said.
The resumption of Indian wild caught shrimp exports to the U.S. is also an agricultural priority area being discussed. U.S. law prohibits the import of wild caught shrimp and its derivative products if protected sea turtle species are harmed in the process. One way around this is to use Turtle Excluder Devices (TEDs) while fishing for shrimp; India views this as a technical barrier to trade.
In conversations with The Hindu, officials on both sides, emphasized that there are priority items in each working group at this stage, cautious not to emphasize any one good or service as having overarching priority across groups. The TPF goes beyond agri-trade to include goods and services in other sectors – and items on these other lists are also of importance, as working groups negotiate on subjects that fall in their respective areas.
Inter-sessional Meeting in July
The Hindu has learned that the two sides are expected to meet at an inter-sessional sometime in July. That is when notes across working groups are compared – and negotiations across goods and service categories begin.
Four working groups were identified during the TPF – agricultural goods, non-agricultural goods, services and investment (includes digital trade), and intellectual property (IP).
On the U.S. side, greater access to the Indian market for medical devices, as well as digital trade, remain priorities, the U.S. official said.
The Indian side is keen on finalising a Social Services Totalisation agreement – i.e., an agreement that will permit Indians temporarily working in the U.S. to reclaim what they pay into the U.S. system.
India also wants to be reinstated as a beneficiary of the U.S.’s preferential market access program – the Generalized System of Preferences (GSP). India was taken out of the GSP program by former U.S. President Donald Trump, in June 2019, for not opening up its markets enough (as per Mr Trump). The program itself expired on December 31 2020, and has to first be renewed before India is re-admitted to it. About $5.6 billion of Indian exports to the U.S. were covered by the program, although the tax savings for these products amounted to less - about $ 190 million.
Congress likely to set higher bar for GSP beneficiaries
The renewal of GSP is featured in the House of Representatives’ America Competes Act (2022), and the Senate’s U.S. Innovation and Competition Act 2021 (USICA). The two pieces of legislation have passed their respective chambers and are currently being reconciled with each other, so they can be sent to President Joe Biden for his assent. The process could carry on through the end of August, according to a report in the American press.
“GSP is a big one. And I think you know, at this point, it’s a little unpredictable where that’s going to go … because we have it has to be reauthorized by Congress,” the U.S. official said, adding that the eventual language in the law will determine what the U.S. ask of New Delhi will be, if India is to be re-admitted to the program.
The new House and the Senate language on GSP require GSP beneficiary countries to meet standards on internationally recognized human rights – including the rights of workers and women.
The bills include provisions to ensure beneficiary countries are following their own environmental laws and also international commitments in this regard, that they are engaged in poverty reduction and anti-corruption, have due process rights, access to fair trials and afford equal protection under the law.
The House language is stronger in certain instances, such as on workers’ rights. The Senate has a clause on GSP countries being assessed on the basis of their data protection laws – including the extent to which the beneficiary “has refrained from imposing, or has eliminated, digital trade barriers, including unnecessary or discriminatory data localization or data transfer restrictions.”
“Digital trade and data related issues is an area where, you know, we want to be engaging much more intensively with the Indian government,” the official said.
The U.S. side hoped that India would keep an “open”, “transparent” and “consultative” approach to finalising the law around personal data privacy, according to the official. “So that we ensure that we don’t have any discrepancies that really ,potentially, negatively impact the trade relationship.”
