A free trade agreement allows for duty-free trade within a specified area, and members set their own tariffs on imports from non-members. The Organisation for Economic Cooperation and Development (OECD) adopts a broader notion that includes non-tariff barriers as well, defining a free trade area as “a grouping of countries within which tariffs and non-tariff trade barriers between the members are generally abolished but with no common trade policy toward non-members.” Countries in geographical proximity often enter into preferential trade agreements that allow member countries outside the boundaries of sovereign nations both market access and non-discriminatory treatment, among other facilities.

The North American Free Trade Agreement (NAFTA), for example, is a free trade area between the United States (US), Mexico, and Canada; the Association of Southeast Asian Nations (ASEAN) Free Trade Area is an arrangement between the ten ASEAN member states; the South Asian Free Trade Area (SAFTA) is the free trade arrangement of the South Asian Association for Regional Cooperation (SAARC); and the African Continental Free Trade Area (AfCFTA) is an agreement between 54 out of 55 African Union members.

This paper focuses on the AfCFTA. It outlines the benefits of the AfCFTA and weighs such potential against the challenges. It then discusses how India can harness the potential of the agreement.

To read the full report by the Observer Research Foundation, please click here.

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This new impetus largely reflects a transformed geopolitical landscape since the last round of EU-India talks were abandoned in 2013. The increased tension between India and China, as well as the EU’s intent to reduce its reliance on Chinese manufacturing have created the conditions for changes in policy by both parties. However, many of the issues that bedeviled the 2007-2013 negotiations remain unresolved. In this analysis, we provide an overview of EU-India trade and investment relations as well as the major topics in these negotiations. The impact of key global initiatives on climate change and WTO reform that will shape the negotiations is also briefly discussed.

Based on this analysis, we discuss three potential ways forward for EU-India trade and investment negotiations: a comprehensive agreement similar to that reached between the EU and Vietnam; a limited investment deal primarily focused on manufacturing; and a reinforced status quo with trade and investment relations growing organically under the existing multilateral umbrella.

To read the full report from Brugel, please click here.

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This report, each chapter curated by a leading expert and South Asia Center nonresident senior fellow, examines US and Indian trade relations, both bilateral and global, and offers forward-thinking policies to help governments in both countries achieve a deeper trade relationship. The various views and ideas expressed by both Indian and US trade-policy experts and industry leaders present a comprehensive analysis to resolve disagreements and establish a short-, medium-, and long-term framework for cooperation. The first and second sections analyze Indian and US trade negotiations and dialogues, respectively, from the recent past to identify strategies moving forward; the third section offers an overview of the last decade in US-India trade negotiations, illuminating concrete achievements and obstinate hurdles; and the final section identifies low-hanging fruit that negotiations often lose sight of and that offer immediate opportunity to secure wins that could reanimate trade negotiations now that there’s a new US administration in place.

The two governments should: Take an incremental approach focusing on low-hanging fruit and gradually build up to more significant areas of contention; address trade issues head on rather than defer them to prioritize strategic cooperation; recommit to a free trade agreement; and establish the institutional architecture to ensure successful negotiations.

To read the full report from the Atlantic Council, please visit here

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Trade in agricultural products is replete with such examples, and might even be the best crucible for pressing national interests while simultaneously cementing and reinforcing shared strategic ones. Simply consider the history of trade disputes over many years between the United States and its European allies. A large number of these involve agricultural trade—from canned peaches in the 1980s to poultry and corn products today. The same is true with Canada, Japan, South Korea, and Australia, and the list goes on.

One should expect that the United States and India are no different. Their strategic relationship blossoms anew with each successive US and Indian administration, yet challenges on trade—specifically agricultural trade—persist and, unfortunately, even fester. Both countries are global agricultural powerhouses, and their respective political sensitivities regarding the economic well-being of farm families are well matched.

That said, one should not conclude that trade tensions over agriculture are necessarily perpetual, or immune to efforts to resolve them. Progress can be made, and achievements, even if hard won, can be infectious by inspiring ambition to do bigger things in the trade relationship. One can even point to prospects for new successes. Although US and Indian trade negotiators did not conclude a “mini-deal” during the Donald Trump administration, they got very close. This was unprecedented, and this progress bodes well for negotiations to resume—and soon be concluded—during the Joe Biden administration. Agricultural trade is a key component of this potential deal, and success can offer an important step forward in increasing bilateral agriculture trade that offers mutual and reciprocal benefits.

However, not all engagement on agriculture trade necessarily requires transactional negotiations. While negotiations (and sometimes dispute settlement in the World Trade Organization (WTO)) may be unavoidable for the most intractable problems, there can also be plenty of opportunities for more cooperative approaches. In fact, this issue paper sets out arguments for this kind of approach—to complement the short-, medium-, and long-term efforts to negotiate bigger and more comprehensive trade deals in the future—and a brief roadmap of recommendations for pursuing cooperative successes. While trade negotiators will continue to be stuck with the hard, dirty work of hammering out trade agreements that can help better integrate national economies and provide economic ballast to broader strategic relationships, technical experts can accomplish quite a lot in parallel to encourage and facilitate increased agricultural trade; again, this is in the mutual interests of both countries.

To read the rest of the report by the Atlantic Council, please click here. 

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For much of the region with limited manufacturing capacity, trade will be the most realistic pathway to meeting domestic vaccine needs during the current crisis. Even for major vaccine producers in Latin America, trade is of paramount importance. Vaccines are a highly complex compound involving numerous ingredients and stages of production. Few countries in the world possess all the necessary specializations and basic materials to produce a competitive and fully “local” vaccine. A made-in-Latin-America vaccine could entail active pharmaceutical ingredients (APIs) from China or formulation development in India, as well as adjuvants from Chile processed in Sweden. The import of intermediate goods is critical to the seamless production and assembly of final goods (vaccines) used for domestic consumption or export.

Given the globalized nature of vaccine manufacturing, governments in Latin America and beyond must ensure unimpeded trade flows across borders. Protectionist temptations can be hard to resist amidst global shortages, especially for countries with greater vaccine self-sufficiency. But these measures rarely pan out as desired and could result in dire regional and global consequences, including an unfortunate scenario of “vaccine nationalism.”

The breakdown of global trade in medical supplies earlier this year provided a fresh reminder of the still-present risks of protectionism. In March and April, for instance, eighty countries imposed export restrictions on medical supplies and equipment. This included at least seven countries in Latin America and the Caribbean region, as well as the world’s top three suppliers [China, the United States, and the European Union (EU)], which collectively account for 68.2 percent of regional imports of these critical goods. To protect lives and livelihoods, vicious cycles of commercial isolationism and retaliation must be avoided at all costs.

Specifically, Latin American and Caribbean policymakers can take actions to tackle shared challenges in trade on at least three levels. First, several viable quick wins exist at the national level. Governments should bring down two-way trade barriers on essential medical products and inputs, including import tariffs and export restrictions. Trade facilitation can reduce additional nontariff barriers through streamlined customs procedures and border crossings, electronic filing, expedited certifications and licensing, etc. Brazil, for instance, suspended anti-dumping and simplified administrative processes for import and export licensing of PPE and medical devices. Similar measures should be upheld to safeguard the trade of vaccines, as well as therapeutics, and other lifesaving products and services.

Second, international coordination between governments can further galvanize and amplify country-level actions. The Joint Ministerial Statement to ensure supply chain connectivity amidst the COVID-19 situation, initiated by Singapore and New Zealand in March, is an example to follow. As of July, ten other countries, including China, have joined the initiative, pledging their commitment to keep trade lines open for essential goods. Two Latin American countries, Chile and Uruguay, have also signed on.

Similarly, multilateral fora such as the Asia-Pacific Economic Cooperation (APEC) and regional integration processes such as Mercosur and the Pacific Alliance are other potential avenues to crowd in best trade practices. APEC members, including three Latin American countries, have issued at least three official declarations on trade facilitation. The Pacific Alliance is playing a critical role in trade policy coordination in Latin America and internationally through its COVID-19 Action Plan and ASEAN-Pacific Alliance Work Plan.

Third, collaboration between the public and private sectors is imperative. Delayed arrivals and departures of essential goods can be costly, especially for time-sensitive products like vaccines. Most vaccines are transported in refrigerated (or frozen) conditions and have limited room temperature shelf life, e.g., between two to twelve hours for Pfizer and Moderna’s COVID-19 vaccines. Even before COVID-19 disruptions, in 2019, the average time to clear exports through customs in Latin America and the Caribbean region was eight days; the average time associated with border compliance for imports was 2.3 days. Accelerating clearance can be achieved through efficient prioritization, nonintrusive inspection, digitization, etc. In addition, airports, seaports, and border authorities should work closely with logistics companies, vaccine producers, and various types of Authorized Economic Operators (importers, brokers, warehouses, and others). New requirements, processes, schedules, or contingent plans that may arise during the pandemic must be communicated clearly and promptly.

Another key area of public-private collaboration in trade is “hard” infrastructure. Enhanced interconnectivity can revitalize regional exports and intra-regional trade, benefitting pharmaceutical and many other supply chains in Latin America, making them more competitive. A 1 percent reduction in transport costs—achievable through infrastructure improvements—could boost overall manufacturing exports between 2 percent and 7.8 percent in Brazil, Chile, Colombia, Mexico, and Peru. In the context of the COVID-19 pandemic, reduced shipping costs and time benefit not only regional vaccine acquisition and production, but in-country distribution of the vaccines and treatments. 

To read the full brief, click here.

Pepe Zhang is an associate director at the Atlantic Council’s Adrienne Arsht Latin America Center.

© 2020 The Atlantic Council of the United States.

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Shriya Chauhan is a consultant at the World Bank

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The importance of digital policies has grown as countries seek to harness the tools of big data, artificial intelligence (AI), and vital infrastructure to trace outbreaks of the virus and assist efforts to find cures and vaccines. While digital tools are proving vital in efforts to track outbreaks and trace contacts, legitimate concerns are growing about potentially invasive government surveillance even after the virus retreats.

These policy areas—health, trade, and digital—overlap in the international, national, and local efforts to reduce the duration of the pandemic and mitigate its effects with respect to human lives and economic well-being.

The analysis in this paper, while initially conducted before anyone had ever heard of COVID-19, has been impacted by its sudden emergence and will likely require updating to assess the experiences of this ongoing crisis. The paper, which focuses on the U.S.-India bilateral relationship, concludes with a series of questions, as opposed to policy recommendations. This is due partly to the very complexity that all governments confront in mapping out digital policies given the ubiquitous role digital networks and devices play in our daily lives. But these questions may have even more tangible relevance now that COVID-19 is forcing a reckoning with a severe interruption in global economic growth, which could be on the scale of the Great Depression in the 1930s. Ultimately, the governments of India, the United States, and other nations will determine for themselves what answers are relevant to their individual circumstances.

Mark Linscott is a Nonresident Senior Fellow in the South Asia Center of the Atlantic Council. 

To view the original report, click here.

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