Timmons in WSJ Op-Ed: Delhi Holds Trade Growth for Ransom
By: Jamie Hennigan, National Association of Manufacturers
Less than two weeks after India took a hard and unexpected stance against a previously agreed upon WTO Trade Facilitation Agreement (TFA), the international community is still reeling and contemplating the possible repercussions. NAM President and CEO Jay Timmons recently outlined in a Wall Street Journal (WSJ) Asia op-ed the impact India’s decision to block an agreement that would have added an estimated $1 trillion boost to the global economy based on domestic concerns could have on global development:
Though India’s economic future was looking bright with the newly elected Indian Prime Minister Narendra Modi’s promise to improve India’s business environment, followed by Finance Minister Arun Jaitley’s budget speech confirming that India was ready to facilitate trade and cut through some of the country’s red tape, the nation’s actions to block this critical agreement have signaled business as usual.
Why? New Dehli says it is protecting its agricultural programs, but many WTO members are calling its bluff. Timmons believes that India is using the deal as leverage since the global agreement requires consensus from all WTO members to move forward.
“This high-stakes gamble risks hurting economic growth worldwide while calling into question India’s respect for its international commitments,” said Timmons in the piece. Even more disappointing is that a trade facilitation agreement would stand to support growth in developing countries the most.
The bottom line is that the agreement would have benefitted all countries working to grow their economies by lowering international transaction costs. India boasts the world’s third largest economy and missed an opportunity to emerge as a world leader in trade and to show the world that it is indeed “open for business.”
As Timmons referenced in the WSJ, India must realize, “a trade-facilitation agreement that delivers on its promise will require strong coordination and assistance from donor countries, international financial institutions, multilateral organizations and the private firms.” All nations will benefit from a more open trading system.
Thousands of U.S. firms trade and do business across the Asia-Pacific region and globally, resulting in the injection of much needed foreign investment into both developing and developed countries. The new Government of India is well aware of this benefit and has expressed public commitment to opening up its borders to international trade on behalf. It is time Prime Minister Modi makes good on those claims to turn the tide on protectionist trade policies and focuses on future opportunities to prove to the international community that India is a viable and worthy trade partner.
Read the full text of Timmon’s piece here.