The US on Thursday said that neither Indian nor American government has stated that there will be a trade agreement in 'five minutes' but it does not see any structural reason which might stop both the nations to have a trade agreement "pretty quickly". "Neither government said that there will be a trade deal in five minutes. That was not us, wasn't (Commerce) Minister Piyush Goyal. So, I think that was just speculation. We do think that there is no structural reason why there can't be one pretty quickly. We know each other's issues," US Secretary of Commerce Wilbur Ross said. He was replying to a question about the proposed trade agreement between India and the US and the need to iron out differences and boost the two-way commerce.
Speaking at the Indian Economic Summit on the proposed trade deal, Goyal said, "So it is a more of a question of scheduling time and scheduling calls and meetings that will determine how long that will take. But I don't see any big issue that is holding it back for any reason." He also said that the announcement of trade deal is not holding back Indian trade or Indian relations either at the geopolitical level or leaders level or even trade and business level. But we want to actually take a quantum leap in that, which is the direction in which both the countries and our negotiating team is working, he said. On why India and the US were not able to announce the deal during the recent visit of Modi to the US, Goyal added that trade does not decide by only one transaction.
"Trade has to consider the past, the present, future, the political dynamics, local issues, long term issues, bilateral and multilateral commitments. So it's a very complex story and in that complexity, we are having an absolutely wonderful engagement, he said.
America is a very powerful economy but also a sensitive country, he said, adding the trade between the countries is robust as imports from the US to India are growing by nearly 30% and exports from India to the US growing by nearly 20% in the last one year. "We are at a reasonable trade level. Certainly our potential has not been reached. Both USTR, US Commerce Secretary Ross, me and our team are discussing breaking the USD 500 billion barriers in terms of our mutual trade. And the way our trade is progressing, I don't see any reason why we can't do that (USD 500 billion trade target) in the years to come, he added.
Talking about US concerns over a high trade deficit with India, Ross said that there was confusion about the US position on the trade deficit. We do feel that our deficit was too high and we intend both to increase total trade and reduce our trade deficit, he said.
He said that the deficit arises mainly because of artificial and protectionist barriers that countries have thrown up which is a primary issue that the US is concerned with. We also believe that focusing bilaterally we can achieve much faster results for all countries involved. "We made a deal with Canada and Mexico. Trade deal often takes eight years or ten years. They frequently take so long that the issues are not even the same at the end of trade negotiations," Ross said.
He said that increasing exports from India would also help India and India has a wonderful opportunity right now to take advantage of trade tensions in the world. "During the bilateral meeting with Goyal today, we have actually prepared chart about what are the areas where China is the big exporter to the US and how does that compare with what India exporting to the US and what are possible solutions, how do we change that mixture. So don't think that we are just focusing on deficit, we are also focusing on total trade," Ross said. When asked about his comments on the views of the Trump administration that treats India as an economic problem, Ross said that the US has shown that they regard India as an important global partner. We upgraded India status in terms of defence. So now they have access to American defence products. So that's was a big thing and a deliberate thing.
There is nothing more sensitive than sharing your most advance military equipment with another country. So I think that is very much proof that we have very great respect for India as Geopolitical partner as well as a trading partner, he said. He added that developing countries should figure out which are the particular segments which you can do the best. Figure out what are the impediments you have now. In case of India, I mentioned logistics. It is a problem here...If you could solve the logistics, that will solve the scale issues, India could be very very much competitive, so those are some suggestions which we are making to India as part of our discussions, he added. Talking about the recent Howdy Modi event in Houston, he said US President has gone out of his way to have a very good relationship with Prime Minister Modi. The whole Howdy Modi event is unprecedented in the entire history of the US... Never has the US sitting President had such a big public event with a foreign leader from any country."
On the issue of India buying S-400 air defence system from Russia and the US threatening to impose sanctions, Ross said, India has historical connections to Russia, we understand that but there are issues of compatibility between Russian and US equipment. That's a complicated issues but that's an issue that needs to get sorted out of both from American point of view and from the Indian point of view, there needs to be some rational approach to it, he said.