But even if the US agrees not to block the appointment of judges to the WTO’s appellate tribunal anymore, it may do so only after extracting what it wants, they added.Joseph R Biden’s election as the 46th American President brightens the prospect of his country’s re-entry into the ambitious Trans-Pacific Partnership (TPP) trade deal with 11 others, which was negotiated by the Obama regime and rejected by Donald Trump, to counter China, analysts told FE.
Any such move (even if the US joins an amended TPP to suit its current realities) will pile up pressure on India to try and join either the TPP or another mega deal to ward off its damaging impact, at a time when New Delhi has turned away from the Beijing-dominated RCEP talks.
Under the TPP, the US had originally proposed to offer duty-free market access in products, including garments, to competitors like Vietnam. At the very least, it may prompt India to expedite its plan to hammer out trade deals with the US, the UK, the EU, Australia and others.
But for any trade agreement with New Delhi now, Washington may insist on tougher labour and environment standards, in sync with the TPP stipulations, given the democrats’ penchant for such issues, some of the analysts reckon.
They also feel America’s adversarial stance on the World Trade Organization (WTO) is unlikely to soften substantially under Biden, given that the US’ strong criticism of the multilateral body predates the Trump administration. Of course, some of the oddities of the Trump era may go. But even if the US agrees not to block the appointment of judges to the WTO’s appellate tribunal anymore, it may do so only after extracting what it wants, they added.
As many analysts have already warned, while the era of Trump may be over, Trumpism, with its “America First” agenda, is here to stay. Moreover, the considerable Republican sway over the US Senate will continue to weigh on Biden’s policy initiatives.
Biswajit Dhar, professor at the Centre for Economic Studies and Planning of JNU, said: “Even after Trump goes, it will be almost impossible to make the US agree to the Doha development agenda (that is crucial to the interest of developing countries) at the WTO.” Similarly, the friction between the two countries at the WTO on a host of issues, including India’s so-called export sops and illegal American subsidies in their solar sector, will continue unabated. However, where Biden may differ a tad from his predecessor is in the assessment of India as a developing country (Trump had attacked China, India and others for ‘self-designating’ themselves as developing nations).
TS Vishwanath, principal adviser at ASL that specialises in trade agreements, believes Biden will focus on four areas, to start with. First, he will tend to reverse Trump’s policies towards various international institutions like the WHO and the WTO and support them, albeit after securing American interests. Second, he will review the Indo-Pacific strategy, and here he may further bolster defence and starategic ties with India.
Third, he will seek to set right American trade policies; a deal with India may take a back seat for now but there could be talks on greater market access. Fourth, he will review Trump’s China strategy. While Biden may not be as aggressively against China as his predecessor, he will continue to pursue the Beijing-containment policy, taking allies on board. Some analysts believe any softer American approach towards an agreesive China will add to India’s worries.
Analysts at Nomura expect “a relatively softer policy stance towards China, as the focus shifts to a multilateral approach in dealing with China (instead of bilateral tariffs)”. “A reduced focus on trade deficits increases the probability of a rolling back of tariffs on China and a deescalation of US-China trade tensions,” they wrote in a report.
“However, we expect US bipartisan pressure on China to continue in the areas of human rights, IPR and technology, and we expect the process of global value chain diversification away from China and US-China tech decoupling to continue.” Reduced trade policy uncertainty will bode well for trade and investment in the region, they added.
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