from Asia Unbound

The Week in U.S.-India Relations: Waiting for the Trade Deal

U.S. President Donald Trump and Indian Prime Minister Narendra Modi at "Howdy, Modi!" in Houston Jonathan Ernst/Reuters

September 24, 2019

U.S. President Donald Trump and Indian Prime Minister Narendra Modi at "Howdy, Modi!" in Houston Jonathan Ernst/Reuters
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There’s been a lot of coverage of the scale and unprecedented nature of Sunday’s “Howdy, Modi!” rally—the 50,000-plus Indian American participants in the enormous NRG Stadium in Houston, the meaning of U.S. President Donald J. Trump’s opening-act appearance for Prime Minister Narendra Modi, and the recognition of the Indian American community’s growing political heft. In later remarks, Trump remarked upon the crowd’s adoration for Modi, calling him “an American (sic) version of Elvis.”

What struck me as unusual was the high degree to which both leaders delivered  domestically oriented political content in their speeches. It was like back-to-back political rallies aimed at different audiences. Foreign policy took a back seat.

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For Trump, this meant a focus, in the middle of his remarks, on U.S. unemployment rates and the benefits of the Trump tax cuts. For Modi, the great bulk of his remarks focused on India’s development and the accomplishments of his government, with trademark Modi facts and figures on sanitation, cooking gas, road building, financial inclusion through bank accounts, and improvements in ease of doing business. This Modi government “report card” served to signal for the Houston listeners his focus and attention to service delivery and improvements in quality of life. Modi could have delivered most of that speech anywhere in India largely without change. And it’s likely that his primary audience was the millions of people watching the event on television back in India.

The actual bilateral policy content of the Modi and Trump remarks—and there was more bilateral policy material in Trump’s speech—covered well-trod ground on the strength of “common values and our shared commitment to democracy;” a recap of two-way investment and developments in energy trade; a placeholder for future defense trade deals; and invocations of the importance of securing borders and guarding against “illegal immigrants.”

As Dr. Tanvi Madan of the Brookings Institution noted, this language will likely hold different meanings for listeners in the United States and India: for Indian listeners, “border security” suggests fortifying against cross-border terrorism from Pakistan, and “illegal immigrants” suggests the recent National Register of Citizens (a new register for citizens in the northeast Indian state of Assam that has excluded 1.9 million residents). Trump did not weigh in on these specific issues in their Indian context but some might interpret his words in that way. He also was present for, but did not address, the huge roar of approval from the crowd when Modi spoke about saying “farewell” to Article 370, which afforded India’s state of Jammu and Kashmir its traditional autonomy, and how it had “deprived the people of Jammu and Kashmir and Ladakh from development and equal rights.” No one at any point mentioned the continued detention of an unclear (but large) number of Kashmiri politicians, intellectuals, businesspeople, and civil society leaders going on more than six weeks.   

The second Trump-Modi bilateral meeting took place on Tuesday in New York. Media reports said that U.S. and Indian trade negotiators were working to reach agreement on something to announce this week, but no deal emerged in Houston, nor in New York. That Modi included his commerce and industry minister, Piyush Goyal, as part of his delegation points to the importance of trade negotiations on this visit.

But the trade issues are doubtless difficult, and have been for a long time. In their pre-meeting press conference, Trump answered a pointed question about this anticipated trade deal with the following:

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Well, I think very soon.  We’re doing very well.  And Bob Lighthizer, who’s right here, was negotiating with India and their very capable representatives.  And I think very soon we’ll have a trade deal.  We’ll have the larger deal down the road a little bit, but we will have a trade deal very soon.

Speculation about the likely outcome centers on some announcement of a limited set of measures to resolve some of the recent trade irritants, such as medical device price limitations in India, tariffs, and some “restoration” of the trade preference known as the Generalized System of Preferences (GSP), which the Trump administration revoked from India in June, citing barriers to market access.

We should anticipate and welcome whatever emerges as the trade “deal,” but without exaggerating what it will be. Resolving sticking points on a handful of issues is simply not the same as a major trade agreement. The U.S.-India trade relationship has been in a rocky patch for more than a year, and any progress on that front will be helpful, but will represent only the first steps toward clearing away problems—not a major trade agreement.

The latter, should such a negotiation begin, will take far more work, and likely years, to see through to completion.

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