India Must Be Careful During Trade Agreement Talks With The US: GTRI

Founder Ajay Srivastava emphasised that India must be vigilant against legal asymmetries that could emerge, noting that the US can impose additional obligations post-agreement.

The economic think tank said that the lack of Fast Track Trade Authority in the US leaves any potential pact open to Congressional modifications.

Source : Freepik

India must tread carefully while negotiating a bilateral trade agreement with the United States, the Global Trade Research Initiative (GTRI) warned on Tuesday. The economic think tank said that the lack of Fast Track Trade Authority in the US leaves any potential pact open to Congressional modifications.

GTRI highlighted that without this authority, the US Congress has the power to amend or reject trade agreements after they have been signed, introducing uncertainty into the negotiation process, reported PTI.

Founder Ajay Srivastava emphasised that India must be vigilant against legal asymmetries that could emerge, noting that the US can impose additional obligations post-agreement.

"Without the Fast Track Authority in place and with the precedent of post-agreement certification allowing the US to impose additional demands, the risk of asymmetric obligations is real," Srivastava said.

The Fast Track Trade Authority, also known as Trade Promotion Authority, enables the US President to negotiate trade agreements that Congress can only approve or reject without amendments.

Historically, this mechanism has facilitated major trade deals, including the North American Free Trade Agreement (NAFTA). However, since its expiration in 2021, the authority has not been renewed, making any trade deal subject to Congressional scrutiny, potential amendments, delays, or even outright rejection.

Post-FTA Certification Adds More Uncertainty

Srivastava further pointed out that beyond the absence of Fast Track Authority, India's concerns should extend to the US’s post-FTA certification mechanism. This process allows the US to unilaterally determine whether its trade partner has met the obligations of the agreement before it takes effect.

"The agreement does not enter into force until the US issues this certification, which historically has been used to pressure countries into making additional legal and policy changes not specified in the original FTA text," he said.

These two factors, he noted, create substantial uncertainty, as they give the US the ability to modify the deal post-signing or impose further requirements beyond what was initially agreed upon.

As India prepares to engage in formal trade discussions with the US starting Wednesday, experts urge policymakers to be mindful of the risks involved in negotiating without safeguards against legislative intervention from Washington. The trade talks coincide with US President Donald Trump's plan to introduce reciprocal tariffs beginning April 2, adding further complexity to the negotiations.