E-Paper
US-India trade deal to be historic, would be a mistake not to sign it: Linscott
Mark Linscott said the India-US deal would be more ambitious than US agreements recently signed with the UK and Vietnam
WASHINGTON: The trade deal currently being negotiated between India and the United States is ambitious and unprecedented, former assistant US trade representative for South Asia Mark Linscott said in an interview on Sunday. Linscott, who is currently a senior adviser at the Asia Group, said the deal would be more ambitious than US agreements recently signed with the UK and Vietnam. Linscott added that there was appreciation in America for India’s stand on agriculture and that the deal would likely not include concessions on dairy and some agri products, such as wheat and that it would be a mistake not to approve the deal since it serves both US and Indian interests.
What is the current state of play in the US-India trade talks? Things seem to be going down to the wire.
At this point, we’re all indulging in some educated guessing. But I actually think the negotiations on the deal were completed last week when India’s Secretary from the Ministry of Commerce and Industry Rajesh Agarwal was here leading an Indian team, working with his counterpart and my former colleague Brendan Lynch, at the office of the US Trade Representative. I think they basically sewed up what is likely to be an agreement in principle but not a legally binding agreement, in which the two sides issue a statement highlighting what is what has been agreed so far. I think then there will be continuing negotiations on the specifics for a legally binding agreement, and that’s likely to be in the next few weeks. So this is all a great scenario. I’m very hopeful. I’m very happy that we do appear to have prospects for a deal. It will be unprecedented and historic. I think it will be a huge feather in the cap for both President Trump and Prime Minister Modi to do this, and we’ve got a bigger negotiation to come. This isn’t the end of negotiations, it’s just the start, right, and seemingly a successful start to the negotiation.
How ambitious is this agreement likely to be?
Based on what we’ve heard and read and the conversations we’ve had, I think it will be substantial. I think it will go further than the other two agreements that have been announced so far with the UK and Vietnam. I think there will be benefits for both sides and concessions that have been agreed on both sides. I think it will be substantial on tariffs. It won’t cover the full tariff schedules for each country, but I think it will be substantial in terms of what we call market access. I think it will include a number of priority non-tariff barriers. I think it will at least start to put together the pieces of some complicated areas like digital trade.
India and the US were in talks for a trade agreement during the first Trump administration. However, those talks fell through. You were closely involved in that process. What went wrong?
For most of my career, I was at the World Trade Organisation in Geneva. I had been the assistant US Trade Representative for WTO and Multilateral Affairs. And our experience with India and India’s experience in negotiating with us was never good. We rarely shared perspectives and we were rarely able to compromise and reach agreements. And later, I found that working bilaterally with India outside the WTO was more productive and that there’s better traction in those negotiations. I think it was a huge missed opportunity in the first Trump administration. I was the first negotiator on that. Those negotiations continued after I retired from the office of the US Trade Representative, but it was clear that a deal was in hand. In fact, in many respects, it was the agreement that got away. It was very unfortunate, and I think to a large extent, it related to President Trump’s perspectives at the time, about whether it was a big enough deal. Hopefully, this time, what has been negotiated is big enough for him. That is the one wild card in these remaining hours. But I’m really bullish. I think it’s going to happen. I think that experience gained in the first administration is important in terms of the two countries being able to reach the necessary compromises for what we hope to be an announcement of a deal in the next day or so.
We’ve seen some reports indicating that the deal is awaiting a green light from Trump. What exactly is Trump looking for?
It’s almost impossible to assess the thinking of the president. He clearly engages in a complicated calculus of what is beneficial for the United States, what’s beneficial for the administration, what’s beneficial for him in terms of winning in a negotiation. What I can provide is my own assessment, which is that I don’t think that the United States and India have ever gone so far in trade negotiations. And for example, I think what they might agree to could exceed what India recently agreed to with the United Kingdom in a free trade agreement.
What do you think the specific terms of the agreement will be? There is some concern about granting access to India’s dairy and agriculture sector.
My assessment is that while the deal will be substantial and unprecedented, it will still be partial. It won’t be a comprehensive deal. It’s not a free trade agreement. I think the ambition is very close to an FTA free trade agreement, but that’s for down the road. I don’t expect dairy to be included. There’s a lot of press attention on wheat. I don’t expect wheat to be included. I think they will be negotiated down the road. I think, in fact, there is a high degree of appreciation on the US side for some of the sensitivities associated with dairy in India. I think there have been accommodations on both sides in terms of those sensitive areas. And agriculture is sensitive for all countries in trade talks. I mean, agriculture is always a sensitive sector in trade with respect to the larger strategic interests.
Can we trust President Trump to stick to a trade agreement? Even as India-US talks are going on, President Trump has threatened countries aligned with BRICS with a 10% tariff. India is a founding member of BRICS. How do we deal with that?
This is a legitimate concern. We have the benefit of experience, and we have examples. Particularly with the US-Mexico-Canada agreement, at least initially, there were tariffs applied that were not consistent with the updated free trade agreement that was done during the first Trump administration. Perhaps even a more telling example is Japan. There was a Trump administration agreement with Japan, the US-Japan trade agreement, and the tariffs that have been applied in this second Trump administration clearly are not consistent with the agreement that was done during the first Trump administration. So, it’s a legitimate concern for any country negotiating with the Trump administration.
Is it a realistic possibility that India and the US will not agree to a deal and that reciprocal tariffs will kick in?
It’s a possibility. I hope it’s not the case. I think it would be a mistake. I think what seems to have been negotiated already is clearly in US interests. I can’t say definitively that it won’t happen, but I certainly hope that it doesn’t happen.
