Thu, Jan 14, 2021

The hard work ahead in improving US-India agricultural trade

In-Depth Research & Reports by Mark Linscott and Scott Sindelar

Related Experts: Mark Linscott,

India South Asia Trade United States and Canada

The United States and India have taken important steps forward in recent years to devote more attention to their trade relationship, which has generally lagged behind the much bigger steps pursued in developing their strategic relationship. However, as both countries know well, an alignment of strategic interests does not always translate into comity in trade interests. One might even argue that a mature and healthy strategic relationship should be able to readily weather the storms arising from occasional trade tensions.

Trade in agricultural products is replete with such examples, and might even be the best crucible for pressing national interests while simultaneously cementing and reinforcing shared strategic ones. Simply consider the history of trade disputes over many years between the United States and its European allies. A large number of these involve agricultural trade—from canned peaches in the 1980s to poultry and corn products today. The same is true with Canada, Japan, South Korea, and Australia, and the list goes on.

One should expect that the United States and India are no different. Their strategic relationship blossoms anew with each successive US and Indian administration, yet challenges on trade—specifically agricultural trade—persist and, unfortunately, even fester. Both countries are global agricultural powerhouses, and their respective political sensitivities regarding the economic well-being of farm families are well matched.

That said, one should not conclude that trade tensions over agriculture are necessarily perpetual, or immune to efforts to resolve them. Progress can be made, and achievements, even if hard won, can be infectious by inspiring ambition to do bigger things in the trade relationship. One can even point to prospects for new successes. Although US and Indian trade negotiators did not conclude a “mini-deal” during the Donald Trump administration, they got very close. This was unprecedented, and this progress bodes well for negotiations to resume—and soon be concluded—during the Joe Biden administration. Agricultural trade is a key component of this potential deal, and success can offer an important step forward in increasing bilateral agriculture trade that offers mutual and reciprocal benefits.

However, not all engagement on agriculture trade necessarily requires transactional negotiations. While negotiations (and sometimes dispute settlement in the World Trade Organization (WTO)) may be unavoidable for the most intractable problems, there can also be plenty of opportunities for more cooperative approaches. In fact, this issue paper sets out arguments for this kind of approach—to complement the short-, medium-, and long-term efforts to negotiate bigger and more comprehensive trade deals in the future—and a brief roadmap of recommendations for pursuing cooperative successes. While trade negotiators will continue to be stuck with the hard, dirty work of hammering out trade agreements that can help better integrate national economies and provide economic ballast to broader strategic relationships, technical experts can accomplish quite a lot in parallel to encourage and facilitate increased agricultural trade; again, this is in the mutual interests of both countries.

The South Asia Center serves as the Atlantic Council’s focal point for work on the region as well as relations between these countries, neighboring regions, Europe, and the United States.