U.S. Trade Representative Katherine Tai is meeting with high-level trade officials and reconvening the U.S.-India Trade Policy Forum to discuss India’s steep tariffs and other trade barriers, many of which are preventing or dampening U.S. exports of tree nuts, apples and dairy to the second-most populous nation in the world.
“There is huge potential for growth between our two economies in areas like the digital economy, services, health-related trade, and even agriculture,” Tai said in New Delhi Monday at a reception before taking part in the Trade Policy Forum. “I believe that a revived TPF can help our trade relationship keep pace with other important aspects of the U.S.-India partnership. But it’s clear that bilateral trade is not living up to its potential.”
Negotiations are exactly what U.S. lawmakers are urging. Seventy-five House members signed a letter Friday asking Tai to negotiate a reduction of Indian tariffs that would allow the country to once again qualify for the Generalized System of Preferences, or GSP.
Congress allowed GSP — a program that allows foreign countries tariff-free access to the U.S. market — to lapse, but the lawmakers say Congress is working to reauthorize it and they would like India back in.
India lost its GSP designation in 2019 after the country pushed up tariffs on U.S. almonds, walnuts, apples, pulses and other commodities. Previously, GSP had given India tariff-free access to the U.S. market for about $5 billion worth of its products.
U.S. walnut exports to India dropped by more than 50% after India raised tariffs on the nuts to about 120%.
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India has raised barriers to U.S. dairy that are based on religious and cultural grounds that the U.S. Dairy Export Council and National Milk Producers Federation say are unscientific.
“While multiple rounds of negotiations in 2019 and 2020 led to some progress, the United States and India did not reach an agreement,” said lawmakers in the letter to Tai. “As such, numerous American products — such as apples, dairy products, and medical devices, among others — still face challenges accessing the Indian market. Clearly, the status quo with India negatively impacts American workers, farmers, and manufacturers.”
The bipartisan letter was led by House Ways and Means Committee members Suzan DelBene, D-Wash., and Rep. Brad Wenstrup, R-Ohio.
“As you know, Congress is considering legislation to reform and reauthorize the GSP program,” the lawmakers continued. “In this regard, we encourage you to advance negotiations with your counterparts in India.”
Tai said lifting India’s trade barriers is a priority.
“At USTR, we hear frequently from our stakeholders on issues that will be familiar to those of you involved in moving goods and services between our two countries: market access restrictions, high tariffs, unpredictable regulatory requirements, and restrictive digital trade measures,” she said. “These are issues where we need to make progress and they will be on the top of my list while I’m here.”
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