A Busy Week in U.S.-India Relations

US, India Settle Last WTO Dispute

The United States and India announced Sept. 8 they have agreed to settle their last outstanding dispute at the World Trade Organization, dealing with India’s ban on US poultry due to concerns about Avian Influenza.

The announcement follows a meeting between President Biden and Indian Prime Minister Modi in New Dehi.

As part of the agreement, India has agreed to reduce tariffs on certain US products, including frozen turkey, frozen duck, fresh blueberries and cranberries, frozen blueberries and cranberries, dried blueberries and cranberries and processed blueberries and cranberries.

“Resolving this last outstanding WTO dispute represents an important milestone in the U.S.-India trade relationship, while reducing tariffs on certain US products enhances crucial market access for American agricultural producers,” US Trade Representative Katherine Tai said.

Six Disputes Already Terminated
In June, the United States and India agreed to terminate six outstanding disputes at the World Trade Organization. India also agreed to reduce tariffs on certain US products, including chickpeas, lentils, almonds, walnuts, apples, boric acid and diagnostic reagents.

The agreement resolves the remaining long-standing dispute and opens a new chapter of bilateral cooperation that will deepen the trade relationship between the United States and India, according to USTR.

Agriculture Secretary Tom Vilsack hailed the agreement, saying it will create new market opportunities for US producers and exporters in the world’s most populous nation. The Administration is “focused on rebuilding trust and strengthening relationships with our global trading partners, including India, and working through the World Trade Organization and other venues to ensure that those partners live up to their obligations so that US agriculture has full and fair access to key export markets,” he said.

In the complaint launched against India in March, 2012, the United States challenged the prohibitions imposed by India on the importation of various agricultural products from the United States purportedly because of concerns related to Avian influenza.

Despite yo-yo gyrations in the resolution of the trade dispute since 2012, a ruling by the compliance panel was put in abeyance since last year. According to the WTO summary, the dispute remained unresolved after the chair of compliance panel informed the DSB of several joint requests from the parties to postpone the issuance of its final report.

India Claims Success on G20

India claimed success in reaching a consensus over the G20 Leaders’ New Delhi Declaration on Sept. 9.

“On the back of the hard work of all the teams, we have received consensus on the G20 Leaders' Summit Declaration” and “I announce the adopting of this declaration,” Prime Minister Narendra Modi told the G20 leaders, including the head of the newly-admitted African Union.

Consensus on the New Delhi Declaration came only after leaders agreed to tone down language concerning Russia’s war in Ukraine at the insistence of Russia and China. The final declaration refers to the conflict as “the war in Ukraine,” instead of “aggression by the Russian Federation against Ukraine” as contained in the last year’s Bali Declaration.

The G20 or the Group of 20 industrialized and developing countries and now the new member African Union is a premier economic forum that took birth in end-2008 in the shadows of the financial crisis. The G20 comprises Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, United Kingdom, and the United States along with the European Union and now the African Union.

Despite the hype about India’s G10 presidency, the NDD seems to rehash previous G20 Leaders' Statements with some inconsequential additions here and there.

The statement emphasizes making WTO a member-driven organization with fully functioning Appellate body by 2024 but falls short in terms of mentioning the need to uphold the core principles of consensus decision making and special and differential treatment which are major demands of the developing countries.

One area where the advanced countries seemed to have prevailed strongly is on trade and environment. The G20 will “Ensure that trade and environment policies should be mutually supportive, consistent with WTO and multilateral environmental agreements.” While the WTO is an organization for negotiating trade rules, advanced countries want to use it for negotiating legally binding commitments from developing countries in environment, as is seen Trade and Environmental Sustainability Structured Discussions, while they enjoy best endeavor clauses in climate negotiations.

Trade Section Following is the text trade section of the G20 declaration:

Unlocking Trade for Growth

19. We reaffirm that a rules-based, non-discriminatory, fair, open, inclusive, equitable, sustainable and transparent multilateral trading system, with WTO at its core, is indispensable. We will support policies that enable trade and investment to serve as an engine of growth and prosperity for all.

Today, we:

I. Renew our commitment to ensure a level-playing field and fair competition by discouraging protectionism and market distorting practices, to foster a favorable trade and investment environment for all. We reiterate the need to pursue WTO reform to improve all its functions through an inclusive member-driven process, and remain committed to conducting discussions with a view to having a fully and well functioning dispute settlement system accessible to all members by 2024. We commit to work constructively to ensure positive outcomes at the WTO’s Thirteenth Ministerial Conference (MC13).

ii. Recognize challenges MSMEs, particularly in developing countries, face with respect to access to information and thus, welcome Jaipur Call for Action for enhancing MSMEs’ access to information to promote the integration of MSMEs into international trade.

iii. Welcome the adoption of G20 Generic Framework for Mapping Global Value Chains (GVC) to help members identify risks and build resilience.

iv. Welcome the High-Level Principles on Digitalization of Trade Documents and will make efforts to encourage implementation, and encourage other countries to consider these principles.

v. Ensure that trade and environment policies should be mutually supportive, consistent with WTO and multilateral environmental agreements.

vi. Recognize the importance of WTO’s ‘Aid for Trade’ initiative to enable developing countries, notably LDCs to effectively participate in global trade, including through enhanced local value creation. We welcome all efforts to mobilize necessary resources in this regard.

Bill Encourages Tech Exports to India

Legislation to encourage exports of US high-performance computers and equipment to India has been introduced by House India Caucus Vice Chair Andy Barr (R-Ky) and Foreign Affairs Committee ranking Democrat Gregory Meeks (NY).

This would enhance “US-India technology trade, linkages between our technology companies, and supply chain resilience for a critical industry,” according to the two lawmakers.

The bill’s introduction coincides with President Biden’s visit to India for the G20 leaders’ summit and his bilateral discussions with Indian Prime Minister Modi aimed at strengthening bilateral economic and trade ties as the United States seeks to diversify away from China.

“In light of the further strengthening of our strategic partnership with India, this legislative change reduces regulatory barriers to technology cooperation,” the lawmakers said.

Under Commerce regulations, the restricted high-performance computers include such commodities as digital computers, electronic assemblies and related equipment controlled under Export Control Classification (ECCN) 4A003. Destination countries listed as ‘‘Computer Tier 3’’ eligible countries in section 740.7(d) of title15 of the Code of Federal Regulations, such as India, cannot receive such commodities, software, or technology without a Commerce license, with limited exceptions for deemed exports.