U.S. President Donald Trump and Indian Prime Minister Narendra Modi in New Delhi in February, 2020.Alex Brandon/The Associated Press
It was quite the switcheroo – even by American standards.
Earlier this month, the United States and India jointly announced an interim trade agreement, hailing it as a historic milestone for the two countries. Days later, Washington stunned New Delhi by tinkering with the fine print.
The White House published a fact sheet on Feb. 9 that elaborated on the details of the supposed quid pro quo. Trouble is, India never agreed to those finer points at the bargaining table.
Unsurprisingly, those embellishments were focused on the U.S. government’s expectations of India. Specifically, the fact sheet cited India’s “commitment” to stop purchasing Russian oil in exchange for lower tariffs on Indian exports. Tensions flared because there was nary a mention of Russia or its crude in their preceding joint statement.
Trump announces trade deal with India centred on oil, reduced tariffs
To be clear, it is not in the security interests of Western countries, including Canada, for India to be purchasing Russian oil on the cheap when the Kremlin is waging war in Ukraine.
Global energy flows, though, cannot be turned on and off like a faucet – a commercial reality the Trump administration failed to grasp when crafting its fact sheet.
Russian oil, however, was far from the only point of contention.
The White House’s fact sheet also claimed that India committed to buy more than US$500-billion in American products, including energy. After New Delhi reportedly objected to the suggestion that it made an ironclad commitment, the U.S. text was softened to qualify that India “intends” to do so. Apparently, it is more of an ambition than an obligation.
Another source of stress was Washington’s inclusion of a supplementary clause about pulses, which are used to make dal, a dietary staple across India.
As The New York Times reported, the U.S. took the liberty of suggesting that India’s plan to eliminate or reduce tariffs on a range of U.S. agricultural products included “certain pulses.”
That immediately stirred controversy among farmers in India, prompting New Delhi to do damage control. Agriculture Minister Shivraj Singh Chouhan, in particular, had egg on his face because he had previously announced a new policy on pulses and characterized it as a roadmap for self-reliance.
“Currently, we have to import pulses from abroad … if we have to import pulses from foreign countries, it is not a matter of joy for us, but shame,” he said.
The White House subsequently removed the reference to pulses from its fact sheet.
(Pulse crops are one of Canada’s exports to India.)
The Indian government was also reportedly vexed to learn that the U.S. had given Bangladesh preferential trade treatment on its textiles. India eventually secured a similar concession from the U.S., according to a report in The Times of India.
Even so, the optics were terrible. It’s hardly the way for U.S. President Donald Trump and Indian Prime Minister Narendra Modi to kiss and make up after months of trade tensions. It appears their once-budding bromance is withering on the vine.
I say this situation calls for a little made-in-Canada masti (“mischief” in Hindi).
Mr. Trump’s trade tactics with India, including on oil, pulses and textiles, are a timely reminder for New Delhi – and the rest of the world, frankly – that Canada is a more credible and trustworthy partner on all matters of trade.
Canadians are true to their word. That is – and has always been – our art of the deal.
“We are a stable, reliable partner – in a world that is anything but – a partner that builds and values relationships for the long term,” Prime Minister Mark Carney said during his address in Davos, Switzerland, in January.
That same message also underpins Mr. Carney’s upcoming trip to India.
Sanjay Kumar Verma, India’s former ambassador to Canada, dubs it the “Carney Moment” in a recent opinion piece for the India Narrative news site.
As Mr. Verma points out, Canadian pulse exports to India are worth roughly US$600-million, but there is also an increasing appetite for Canadian oil and other natural resources.
“Greater regulatory facilitation of Indian exports in pharmaceuticals, digital services, engineering goods, and refined petroleum products would significantly expand Indian market access in Canada,” Mr. Verma writes.
“Reciprocally, India is expected to further open market space for Canadian exports in energy resources, potash, pulses, timber, and advanced agricultural technology.”
Importantly, he stresses that “people-to-people trust” underpins sustained strategic and economic co-operation.
By being reliably unreliable, Mr. Trump is inadvertently burnishing Brand Canada on the global stage. Let’s be sure to thank him, eh?