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Indian retaliation on Trump tariff on steel, aluminium not apt, says USTR

Press Trust of India/Washington 13 Jul 18 | 08:06 AM

A top official from the US Trade Representative has said the recent retaliatory measure by India against America's decision to impose import tariff on steel and aluminium was not "appropriate".  

Deputy USTR Jeffrey Gerrish on Thursday told a Washington audience that last year's reduction in the US-India trade deficit was not satisfactory enough.   

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"We were disappointed with the fact that India actually has imposed retaliatory measures actually it's not imposed them yet but announced retaliatory measures.

"They (India) are approaching this as a safeguard metric that we have imposed. On that basis, they've determined that they have a basis to impose retaliatory measures, Gerrish said.

The imposition of import tariff on steel and aluminium is not a safeguard measure, he said, adding that the safeguard measure was taken recently on washers and a solar panel.

"We know how to do a safeguard measure. So there's no basis at all to retaliate against us," he said at the first Annual Leadership Summit of US India Strategic and Partnership Forum (USISPF) here.

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"We think that it was not appropriate. We've made that very clear. That being said, India could have at least postpone the retaliation until August 4 and there may be some basis to have further discussions on that issue as we approach that date," the top USTR official said.

Responding to a question on Indo-US bilateral trade, Gerrish said the progress made in bilateral relationship has been truly historic over the last several years.

The two-way trade last year reached $126 billion and that was a landmark, he said, adding that there's a lot of positive factors in these ties.

"We are certainly pleased with that. That being said, we can certainly improve our trade relationship that we have with India.

"We are two of the biggest economies in the world. US biggest economy, India is the sixth largest economy in the world. Given how larger economies are, we think we can grow our trade significantly, we think that it should be much larger than it is," he said. 

The Trump administration, he said, hopes to grow trade with India to build new platforms.

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That being said, the US wants this trade to grow on a more balanced basis. The trade deficit is 2017, he said, adding the $28 billion trade deficit, the eighth largest, still remains large.

"That's something we would like to address and bring down," he said.

"We think one of the big factors driving that are the barriers to trade that our companies face in trying to access the Indian market. Those can take the form of tariff barriers but also non-tariff barriers as well," Gerrish said.

Some of the barriers that US companies face in India, he said, is in the information and communications technology sector.

There has been an increase in tariff in India recently, there's also testing requirements that are in place, which the US is also trying to address in its engagement and not to miss the issue of medical devices, he said, adding there are price controls in place which often results in US companies having to sell at a loss.

On the agricultural side, India-bound tariffs exceed 100 per cent at this point on an average basis. US farmers and ranchers and growers are facing barriers on products like dairy and pork, he said.

"So we really want to try to address those barriers and we have active engagement with India and we're hopeful that we will be able to resolve those issues," Gerrish said.

The Trump Administration, he said, has put in place a mechanism to address the issues related to trade. Market issues is part of those discussions.

"Those discussions so far we think have been frank and positive. But there's a lot of work still to be done and a lot of issues still to be addressed," the USTR official said, asserting that America's engagement with India on these issues is going to be a positive development for the relationship.

"We think that a greater economic liberalisation and a growth in our trade with India will be a benefit to both economies. Businesses and workers and consumers in both countries will benefit and will be mutually beneficial to both the countries," he said.

Responding to a question, Gerrish said that US President Donald Trump has been clear that economic security is part of the national security.

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"Part of economic security is developing strong economic relationships with our closest allies and India would be one of those closest allies that we have. And it's a way of sort of counter balancing China's influence in the region," he said.

"I think we want to build up that economic relationship as much as possible and defence sales certainly would also help in that regard," Gerrish said.  

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