Biden’s vision offers opportunity for India Inc

The Interim National Security Strategic Guidance, issued under the authority of the US President on March 3, asserts that the US, in its international engagements, would “redefine America’s interests in terms of working families’ livelihoods, rather than corporate profits or aggregate national wealth”.Clearly, Joe Biden has absorbed the lesson from the Trump victory in 2016, and the latter having got 74 million votes in 2020, 11 million more than in 2016, despite all the criticism of his polarising and whimsical behaviour and decision-making. In the globalisation of production and trade, led by the US since dissolution of Soviet Union in 1991, the US economy benefitted in the aggregate, the elite benefitted, but 30- 40% of the population in the middle saw their wages stagnate, longevity come down, death rates and drug addiction go up. This was the segment drawn to Trump and has largely remained loyal to him since. He continues to dominate the Republican Party, despite his electoral loss, and has raised prospects of a 2024 re-run.At her confirmation hearing in the US Senate on February 25, the nominee for US Trade Representative, Katherine Tai, said that the US would not be seeking only efficiency in global production through trade policies and negotiations, but would be adopting a “worker centric” approach. This echoed the comments of her Trump presidency predecessor Lighthizer, who had criticised the unbridled pursuit of efficiency for offshoring of US jobs.The Interim Guidance goes on to declare that the US would “only pursue new trade deals after… investments in American workers and communities”. During the campaign, Biden had repeatedly promised that any new trade deals would come only after an increase in competitiveness of the American worker through investments in infrastructure, skills and technology. In a speech on March 3 itself, previewing the new document, Secretary of State Blinken had articulated that the US would “fight for every American job, and for the rights, protection and interests of all American workers”.While not adding new tariffs so far, unlike Trump, Biden has not rescinded the earlier ones as yet, and has issued Executive Orders calling for “Buy America”.The Guidance also says that “in today’s world, economic security is national security”. This is a theme oft repeated by the new National Security Adviser Jake Sullivan. There is intensified search for “trusted, secure supply chains”, to break the Chinese current advantages in rare earths, pharmaceutical ingredients, and emerging technology areas such as AI and 5G.Interestingly, in response to a question, Tai said that she preferred the term “re- shoring” to “onshoring” since the former allowed for trusted supply chain relationships.These comments reveal the trend in the new administration’s approach to trade and economic relationships. There is an inherent opportunity for India to further rework its geo-economic engagement with the US, to its economic and geopolitical advantage. The two countries should consider starting a Strategic Commercial Dialogue, going beyond the USTR’s normal preoccupation with market access issues based on current patterns of production. New areas of supportive interactions should be explored in emerging technologies, through in-depth dialogue between business and governments in both countries. The US could benefit from India’s skilled work force and tech entrepreneurs in meeting the Chinese competition. The existing Global Comprehensive Strategic Partnership provides the framework for trusted, secure supply chain arrangements. The US has variously described India as a “pre- eminent partner in the Indo- Pacific”, a “net provider of security” in the region, and that it sees the rise of India to be in its own interest. It should, therefore, allow sufficient space for Indian industry in the new reordering. As India looks to expand output through production linked incentives, or attract foreign investment, access to major markets would incentivise business.At the Tai hearing, Senator Cornyn of Texas, co- Chair of the Senate India Caucus, called for building a strategic economic partnership with India. The moment must be seized by both sides. Otherwise, we would remain bogged down, like the Senators from Montana, Louisiana and Washington did, in talking about market access for apples, pulses and shrimp. The growing strategic partnership would not have the ballast of a more solid economic interlinkage.(The writer is former Indian ambassador to the US)

from Economic Times https://ift.tt/3sRkooQ