The “first tranche” of the India-US bilateral trade deal will be ready by July, Commerce Minister Piyush Goyal promised over the weekend.
From his long experience of trade negotiations, Abhijeet Das, former head of the Centre for WTO Studies, believes the US will pile on the pressure, India will resist as it has in the past when it comes to key sectors like agriculture and everything will go down to the last mile.
“It is in resonance with what we heard from Marco Rubio and what we subsequently heard from the US ambassador to India,” he told StratNews Global on The Gist. “So it seems that most of the issues have been ironed out, but the difficulty is that the last 1% or the last mile issues are the most difficult to resolve, hardest to address.
“So whether the first tranche of the trade deal actually happens by mid-year end of July remains to be seen. We were supposedly close to the first tranche of the trade deal a few months earlier, but that did not happen.”
He sounded a warning on the “weapons” the US is bringing to the trade talks. The United States has proposed imposing 12.5% tariffs across the board on about 55 countries, 10% on another handful of countries.
“Now, this is just one part of the section 301. The second part of section 301 pertains to investigations around so-called excess capacity. That could give United States further leverage to impose additional tariffs. Let’s assume that section 301 tariffs get challenged in US courts again. And let’s assume that these tariffs are thrown out. Then there are many other provisions under the US statute which will permit the US to impose additional tariffs.”
From the WTO perspective, all these tariffs breach multiple commitments of the US at the WTO and are totally illegal. So what India are negotiating really is giving hardcore long term concessions to the United States for it to reduce some of its tariffs, which ab initio are illegal. So this really sets the stage whereby US retains negotiating chips in this asymmetric environment of power based negotiations.
