THE TTALK QUOTES 

On Global Trade & Investment
Published By:
The Global Business Dialogue, Inc.
Washington, DC  Tel: 202-559-9316
 
No. 74 of 2019
FRIDAY, NOVEMBER 15, 20219

Click HERE for last quote from an ITC working paper on the Japan-Korea Dispute and Semiconductors


ON TRADE AND FRIENDSHIP

 "President Trump is definitely my friend, but he is also a friend of India."

Prime Minister Modi
(as interpreted)
September 24, 2019
CONTEXT
President Trump and Indian Prime Minister Narendra Modi spoke to reporters at UN Headquarters on the morning of September 24. The Prime Minister’s trade comments were brief.  He said he was happy about Petronet’s $2.5 billion investment in Tellurian’s Driftwood LNG terminal in Louisiana. Petronet LNG is India’s leading oil and gas company, formed to import LNG and set up LNG terminals.

President Trump’s comments on trade were more expansive. In his speech to the U.N. General Assembly earlier that morning, he had made trade the linchpin of his administration’s agenda:

At the center of our vision for national renewal [he said] is an ambitious campaign to reform international trade. For decades, the international trading system has been easily exploited by nations acting in bad faith. As jobs were outsourced, a small handful grew wealthy at the expense of the middle class. 

In America, the result was 4.2 million lost manufacturing jobs and $15 billion in trade deficits over the last quarter century. The United States is now taking decisive action to end this grave economic injustice. Our goal is simple: We want balanced trade that is both fair and reciprocal.

He then pointed to agreements and potential agreements that he believes meet or could meet that goal, namely, USMCA with Mexico and Canada, the new agreement with Japan, and a possible, post-Brexit agreement with the UK. 

Two hours later, in the press conference with Prime Minister Modi, he added India to the list. “I think very soon we’ll have a trade deal,” President Trump said. “We’ll have a larger deal down the road a little bit, but we will have a trade deal very soon.”

Fast forward to this week, and it is clear work is being done.  Piyush Goyal, India’s Minister for Commerce and Industry was in Washington Wednesday for talks with USTR and key people in the private sector.
COMMENT
Our guess is that both leaders want a deal. It’s more than a guess. The evidence is plain. Beyond Mr. Trump’s clear statement to that effect, a statement made with Prime Minister Modi at his side, a U.S. India agreement offers potential benefits for both sides. For India there is the hope of restoring GSP privileges and perhaps eliminating the 232 tariffs on steel and aluminum. For the U.S., there is the prospect of opening markets for U.S. products from apples to coronary artery stents. 

By themselves such opportunities might not be enough, but keep in mind the context. Mr. Trump turned away from the Trans-Pacific Partnership Agreement on January 23, 2017, three days after taking the oath of office. On November 4, just eleven days ago, Prime Minister Modi took India out of RCEP, the China- led Regional Comprehensive Economic Partnership. Both leaders may be hungry for a win on trade. And to coin a phrase, in trade “win-win” is the name of the game. So a deal may be possible, but it is hardly assured.

Finally, there is the reality – explicit in President Trump’s remarks – that the U.S. administration is looking for a fairly modest agreement this year, with a larger deal to follow later. By “modest” we mean an agreement, like the recently announced deal with Japan, that can be put into effect without Congressional action. With USMCA stalled and the 2020 U.S. election less than a year away, America’s next comprehensive trade agreement will have to wait for the next president, that is, the man or woman who takes the oath of office on January 20, 2021. 
RELATED EVENT - NOVEMBER 20, 3-4:30 PM
India and the United States in a Changing Trade Dynamic i s the title of this next GBD event, sponsored by Steptoe & Johnson and the U.S.-India Strategic Partnership Forum. The title link will take you to the announcement for this event, including the roster of speakers and registration options. Click now. Register today. 
SOURCES & LINKS
The President and the Prime Minister is the transcript of the short press conference at the United Nations in New York on September 24. This exchange occurred just before President Trump and Prime Minister Modi began their bilateral meeting. This transcript was the source for today’s featured quote.

The Most Fulfilling Mission takes you to President Trump’s address to the 74th Session of the United Nations General Assembly.

Seeking GSP Restoration is a Financial Express article on Mr. Goyal’s visit to the United States. 

U.S. Medical Devices and Ag. Exports is another look at this important visit, this one from the Business-Standard.
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