exports
January 21, 2020

Would A Trade Deal With India Be A Home Run for Dairy?

 |  By: Anna-Lisa Laca

At the end of last week, news broke that President Donald Trump is currently in trade negotiations with India and plans to travel there relatively soon.

“White House sources tell Pro Farmer that Trump has made the decision to visit India, and he wants to this month,” said Pro Farmer Policy Analyst Jim Wiesemeyer on Friday’s AgriTalk Radio Show. “[Timing] depends on the Senate trial going on. If not January [he’ll visit in] February.

“They will announce a mini trade agreement that will include access to U.S. produce and dairy products,” Wiesemeyer continued.

Friday night in an interview with AgDay’s Clinton Griffiths, Gregg Doud, chief ag negotiator for the U.S. Trade Representative, confirmed the president does plan to travel to India. 

There are conversations with India pending. I believe it's in the press that the president is planning to go to India here at some point in the not too distant future," Doud said. "So yes, there are conversations leading up to that, and those include discussions about agricultural topics."

When pressed on whether or not the president hopes to secure a trade deal with India, Doud mentioned deliverables are likely. "The president is in the press that he's planning on going to India at some point, and so typically the way that works is you work to tee up some deliverables for those types of meetings."

Specifically, India will ask the U.S. to roll back higher tariffs on steel and aluminum in the deal, too, Wiesemeyer says. He believes this deal will be secured faster than the U.S.-China negotiations.

India denied market access to U.S. dairy products from 2003 to 2019, despite receiving preferential access to the U.S. market under a special duty-free trade arrangement called the Generalized System of Preferences (GSP). Over those years, India cited a variety of shifting reasons as the basis for its illicit trade barriers, including unscientific restrictions on U.S. livestock feeding practices.

Would market access to India be a home run for the dairy industry? Jaime Castaneda, senior vice president of trade policy at U.S. Dairy Export Council, is doubtful.

“I can tell you that I know that the president is actually going to India. I can tell you that we know that the U.S. government has been in negotiations with India. But we don't know whether there's going to be any agreement with India,” he said. “India is a very difficult country but, of course, if the president does end up going to India, I don't think he's gonna go to India and come back with empty hands.”

Similarly, Doud isn’t confident the deal would be a home run for the dairy industry either. 

“It's an enormous opportunity, but it's really complicated and different. And I can't say anything more than that right now, because we're negotiating,” Doud said.

Still, Castaneda said he wouldn’t characterize it as a market with the same importance as other markets. 

“I have met a lot of protectionist industries and protectionist countries in the world. I don't think I've never met anybody as protectionist as the Indians,” he explained. “So, this is why, even though the market is big and the opportunities could be large, and we could actually benefit significantly, I'm always going to be lukewarm about the expectations that I'm going to be put forward.”

If U.S. dairy products could be sold there it would benefit the market tremendously, he said. 

“We are working obviously with the U.S. government to try to accomplish something,” Castaneda noted. “But certainly, I don't want to put a lot of eggs in this basket and that’s why I prefer not to create huge expectations for my members in the U.S. dairy industry farmers, Coops, manufacturers and exporters  as market for U.S. dairy as South East Asia and China, even though it could be.”