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India US ties: Under Biden, less acrimonious trade ties likely; sticking points may remain

While Joe Biden's term as president is expected to bring the US back into various multilateral forums, experts aren’t entirely sure what his term could mean for bilateral trade ties.

Written by Prabha Raghavan | New Delhi | Updated: November 18, 2020 7:24:58 am
joe biden kamala harris us elections, pm modi joe biden, us president elect,us elections 2020, us presidential electionsWhile cooperation in the Indo-Pacific and the Covid-19 pandemic are the two areas of continuity between the Trump administration and the incoming Biden presidency, climate change is an old favourite of the Democratic establishment.

India may see a less transactional approach from the US towards trade once Joe Biden swears in as the 46th President of the United States in January 2021, feel experts. At the same time, the strong protectionist rhetoric set by outgoing President Donald Trump may be hard to shake, they feel.

Biden, during his campaign, had criticised Trump’s various policies, including his affinity for trade wars with various global economies that the President-elect in a March/April 2020 edition of American magazine Foreign Affairs termed “ill-advised”. While his term as president is expected to bring the US back into various multilateral forums, experts aren’t entirely sure what his term could mean for bilateral trade ties.

Take, for instance, the long-awaited mini trade deal between India and the US. While commerce minister Piyush Goyal had over the last several months said that the two countries were ready with a package for a “quick” deal, there was little to no affirmation from the American side on this. Now, there is uncertainty over what shape this agreement will take, if it does go through once Biden takes over.

READ | What does President-elect Joe Biden mean for India, its relationship with US?

“You have a mini-trade deal ready to move forward and for the Biden administration to show success, just like signing the climate deal and getting back into WHO, it may consider signing a trade deal as a quick win with India to send a message to geographies that it values its allies,” said US-India Strategic Partnership Forum president Dr Mukesh Aghi, adding the Indian market provides a huge potential for American companies at the moment.

“Geopolitically, both countries are aligned and I believe the style of the Biden administration will change. It will be multilateral, It’s going to be much more thoughtful and predictable,” he said. “On the economic side, there will be much stronger collaboration between the countries vis-a-vis China, because companies are looking at shifting some of their supply chain out of China to de-risk their global supply chain,” he added.

However, others feel the Biden administration may want to go back to the drawing board with its approach towards this deal. “Since the pitch is going to be very different and more diplomatic, there could be attempts to find out if there are other areas in which India could increase market access for the US,” said trade expert Biswajit Dhar, professor at Jawaharlal Nehru University’s Centre for Economic Studies and Planning.

READ | PM and Biden talk; flag Covid, climate change and Indo-Pacific

The change in guard may mean a less acrimonious approach to trade relations, but not a drastic change in US priorities and willingness to concede on long-standing sticking points between the two countries, including agriculture, dairy, poultry and intellectual property.

The President-elect himself had stated, in the Foreign Affairs piece titled ‘Why America Must Lead Again’, that he would not enter into “any new trade agreements” until his government had “invested in Americans and equipped them to succeed in the global economy”.

“I don’t see a major change in bilateral relations, because Trump had actually set a tone bordering on nationalism of ‘America First’. I think it will be difficult for any administration to shake off. Anything the administration does that shows it is being lenient on these countries may not be seen kindly by the anti-Biden crowd that he plans to look out for as well,” said Dhar.

Surely enough, Biden had, during his campaign, launched a call to “Buy American”—a slogan similar to Trump’s focus on making America “Great Again”.

“The hard-nosed bargaining may not be given up, but what may happen is that the relationship between India and the US may become less acrimonious. While Trump was going around naming and shaming India as ‘tariff king’, the Biden administration may leverage its influence without name-calling just the way previous administrations had done,” he added.

“On trade issues particularly, what we have seen over the years is that the US approach has been slightly indifferent and not in sync with other major countries … it has been going on from the days of the Obama Administration,” said another trade expert who requested anonymity.

“We’ll have to see who becomes the new United States Trade Representative and what strategy they come out with for engaging with countries,” the person added.

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