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Informist, Tuesday, Mar. 25, 2025

 

NEW DELHI – The lack of a fast-track trade authority in the US, which ensures smooth trade deal negotiations without procedural delay, may hinder New Delhi's discussions for a trade pact with Washington, Global Trade Research Initiative said in a report. The US Fast Track Trade Authority, also known as Trade Promotion Authority, lapsed in 2021 and hasn't been renewed since.

 

The authority is a special mechanism that allows the US president to negotiate trade deals without accepting amendments to the agreement from Congress. The president only needs to take an up-or-down vote from Congress. It played a key role in the negotiations for the North American Free Trade Agreement and the Central America–Dominican Republic Free Trade Agreement. 

 

India is preparing to launch negotiations for a multi-sectoral bilateral trade agreement with the US. Currently, US government officials, including Assistant Trade Representative for South and Central Asia Brendan Lynch, are in New Delhi to discuss the deal that was proposed in February. 

 

"The absence of Fast Track Trade Authority exposes any finalised agreement to unpredictable legislative intervention in Washington," Global Trade Research Initiative Founder Ajay Srivastava said. Besides, the US post-trade deal certification mechanism can pose an additional challenge to India's trade talks with the US, Srivastava said. The certification mechanism allows Washington to unilaterally determine whether a partner country has fulfilled its obligations under the agreement.

 

"The agreement does not enter into force until the US issues this certification, which historically has been used to pressure countries into making additional legal and policy changes not specified in the original agreement text," Srivastava said. "This is not a mutual process; it gives the US extra leverage after negotiations, effectively renegotiating terms already agreed upon."

 

India must proceed with caution as it negotiates its agreement with the US, Srivastava said. "Without Fast Track Authority in place and with the precedent of post-agreement certification allowing the US to impose additional demands, the risk of asymmetric obligations is real."

 

Under the trade deal, India and the US aim to expand market access, reduce tariff and non-tariff barriers, and also deepen supply chain integration. Both sides are currently engaged in finalising the scope of the proposed multi-sectoral bilateral trade agreement. The two countries aim to launch the first tranche of the agreement by the fall of 2025.

 

The Indian government is counting on the bilateral trade agreement to safeguard the economy from the effect of the reciprocal tariffs that the US has proposed to impose from Apr. 2. US President Donald Trump has announced that Washington would impose from Apr. 2 reciprocal tariffs on India and several other countries, based on the tariff and non-tariff barriers faced by American goods. The reciprocal tariffs could expose Indian goods to a duty of around 10%, and lead to a loss of $6 billion in exports for India, according to estimates given by Emkay Global Financial Services. 

 

The US is India's top export destination, with a share of 17% in total merchandise exports. In 2023-24 (Apr-Mar), India exported goods worth $77.52 billion to the US with a trade surplus of $35.32 billion.  End

 

US$1 = INR 85.76

 

Reported by Krity Ambey

Edited by Saji George Titus

 

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