Port Wings, 3 July 2019:
Moving forward towards the anticipated route to sort out trade disputes, India and USA mellowed down their stances and decided to give dialogue a chance to clear all misconceptions in the trade relationship between them.
Unlike the trade dispute between China and USA that reached its crescendo in recent months and chances for ironing out issues through talks looks nearly impossible, the dispute between India and USA is well managed with more room for talks than any tit-for-tat actions without analyzing overall impact on bilateral relationship.
Prime Minister Narendra Modi and President Donald Trump during the G20 Meet in Osaka aired their concerns over the bilateral trade disputes and agreed for an early meeting of their commerce ministers to sort out the issues.
Though trade is an important part of the booming bilateral relationship, a row over market access and tariffs has escalated in recent months, leading to fears of a protracted dispute.
Taking the issue to next level, President Trump said that India’s “very high” tariffs on US goods are “unacceptable” and must be withdrawn.
Briefing reporters on the Modi-Trump meeting, Foreign Secretary Vijay Gokhale said the issue of trade was discussed by the two leaders.
“There was a discussion on trade, both sides aired their concerns, both sides spoke about the interest of the other side and what was agreed was that the trade ministers of both countries would meet at an early date and would try and sort out these issues,” he said.
“The Prime Minister did mention in particular that we had taken some action after the Generalized System of Preferences (GSP) was revoked, that that was now something that already had happened and now we should now look forward and we should see how we can resolve some of these issues,” Gokhale said.
President Trump welcomed this idea, he said, noting that both US Trade Representative Robert Lighthizer and the Treasury Secretary Steven Mnuchin were in the room when the two top leaders met.
The Modi-Trump meeting assumes significance in the wake of the strain that has popped up in the bilateral relationship on a host of trade and economic issues.
The Generalized System of Preference (GSP) is the largest and oldest US trade preference programme and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.
The government on June 21 last year decided to impose these duties in retaliation to the US decision of significantly hiking customs duties on certain steel and aluminium products. America, in March last year, imposed 25 per cent tariff on steel and a 10 per cent import duty on aluminium products.
Many US companies like Google, Mastercard, Visa and Amazon have raised concerns over the issue of data localisation and its impact on their operational cost. India has also dragged the US to the World Trade Organisation’s dispute settlement mechanism over the imposition of import duties on steel and aluminium.