The Indian negotiators would be travelling to US from April 20-22 to work towards finalising the legal agreement based on the joint statement of February 7 while preserving the comparative tariff advantage in the American market
“As a follow-up of the joint statement, an agreement has to be finalised. If the (reciprocal) tariffs under the International Emergency Economic Powers (IEEPA) are not there what kind of commitments will we get which will give us a comparative advantage in the US market,” a senior official said.
“India and the U.S. will work together to finalise timelines and next steps as part of the ongoing engagement,” Commerce Secretary Rajesh Agrawal told reporters.
The Indian team will be led by chief negotiator Darpan Jain, additional secretary in the Department of Commerce. He will be accompanied by officials leading various tracts of the deal.
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Section 122 Duties
After the joint statement on the interim trade deal, on February 20 the US Supreme Court invalidated the reciprocal tariffs announced on April 2 last year. After the Supreme Court order the US government by executive order imposed 10% duties on all imports under section 122 of the Trade Act.
It also initiated two investigations under the Section 301 of Trade Act on excess capacities in its 16 economies and forced labour issues against 60 economies to retain the leverage in trade negotiations. Both these investigations covered India. Under Section 301 there is no limit on the level of tariffs that the US can impose. “The government of India has submitted its response to the request for consultations by the US Trade Representative (USTR) on the investigations,” Agrawal said.
“Both sides will sit together and discuss how these issues need to be structured and addressed,” he added.
Agrawal said since the joint statement there have been virtual discussions with the US and no physical meetings. “Every country is now calibrating its earlier deal with the US. So we are also moving in that direction. Looking at what will be a legal agreement and the trade-offs. The trade-off from the other side is something that we like to hear from them,” the official quoted earlier said.
Bilateral Trade Agreement
After the joint statement the US had removed 25% tariffs on Indian goods that were imposed for buying crude oil from Russia. It was to bring down reciprocal tariffs on India down to 18% from 25% but the US Supreme Court verdict intervened. The interim deal between India and US is a stepping stone to a wider Bilateral Trade Agreement (BTA)
The verdict did not cancel the formal trade agreements that the US had signed. USTR Jamieson Greer has stated that the U.S. “expects to stand by” its trade deals.
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The European Union that was in the middle of ratifying the US-EU Framework Agreement has put it on hold. They are now pushing for a deal that reflects the lower baseline tariff environment and refunds.
Canada and Mexico that are part of the US Mexico Canada Agreement (USMCA) are reportedly seeking stronger “anti-tariff” guarantees in the renewed agreement to prevent the U.S. from using alternative authorities like Section 122 to bypass the free trade agreement again. China too is having a rethink on some of the commitments it has made.
TOPICSTradeThis article was first uploaded on April fifteen, twenty twenty-six, at twenty-eight minutes past six in the evening.