India cautious as US deals with Japan, others unravel
is treading cautiously in its trade talks with the US, persons familiar with the issue said, citing a setback in America's recent deal with Japan, and continuing challenges in closing two other deals announced by President Donald
Trump
- with Indonesia and Vietnam.
Japan has disputed the terms of its trade deal with the US, with Tokyo's interpretation diverging from that of the Trump administration. Japanese officials maintain there is no written agreement yet, while US officials claim Tokyo has committed investments in the US, from which local taxpayers would get nine-tenths of the profits.
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A Japanese official in a statement last week said it expects the terms of the $550-billion investment package will see profits being split between the two countries based on the degree of contribution. This contradicts Trump's claim that Japan would bear the entire investment burden on its own, with the US receiving 90% of the profits.
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On Saturday, commerce and industry minister Piyush Goyal said the negotiations for a bilateral trade agreement with the US and Oman were at an advanced stage. He also said a team of negotiators from the US will visit India in the second half of August to take the talks ahead.
India would not be bound by timelines when it came to trade negotiations, the minister said, signalling that the government won't rush into a deal at the cost of national interest.
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Trump unilaterally announced a trade deal with Indonesia following a conversation with President Prabowo Subianto, but the deal is yet to be signed.
On July 22, Indonesia's chief negotiator and coordinating minister for economic affairs, Airlangga Hartarto, issued a joint statement with US Trade Representative Jamieson Greer, outlining the framework for the deal and clarifying import tax rates. The statement included additional information on non-tariff measures and commercial agreements, and the two sides agreed to continue negotiations to finalise the pact.
"Yet, the risk of a policy setback remains high if the political agreement is not turned into a legal instrument," according to a commentary by Iis Gindarsah, a visiting senior fellow specialising on Indonesia at the S Rajaratnam School of International Studies (RSIS) in Singapore.
Meanwhile, Vietnam is yet to officially confirm the tariff rates announced by Trump as part of a bilateral deal, it is learnt. Hanoi fears that its exports to the US could decline by a third if higher tariffs announced by Trump take effect.
Vietnam's total exports to the US amounted to $120 billion last year, according to official data. "Tariffs of 20% to 40% would slash export revenue by up to $37 billion, and hit the majority of Vietnam's key industries, including electronics, machinery, garments, footwear and furniture," a recent Bloomberg report said.
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