President Biden visited India and Vietnam recently to strengthen U.S. trade, economic, and other ties amid a continuing effort to “de-risk” supply chains from over-reliance on China.
Biden reiterated that the U.S. is “not looking to decouple from China” and said his trip was “not about containing China,” noting that “we’re all better off if China does well.” Instead, he said, his goal was “having India cooperate much more with the United States, be closer with the United States, Vietnam being closer with the United States” in order for the U.S. to “have a stable base in the Indo-Pacific” where “the international rules of the road are abided by.”
In India, the two sides announced an agreement to resolve their last remaining dispute at the World Trade Organization regarding restrictions India imposed more than a decade ago on imports of U.S. poultry (an agreement to resolve six other disputes was announced in June). Under this agreement India has agreed to reduce its import tariffs on U.S. frozen turkey, frozen duck, and fresh, frozen, dried, and processed blueberries and cranberries.
The Office of the U.S. Trade Representative said this agreement “opens a new chapter of bilateral cooperation that will deepen the trade relationship between the United States and India.” Washington has been steadily working to increase economic integrate with New Delhi in recent years, seeing the world’s most populous country as potentially playing a major role in the emerging U.S. strategy of “friendshoring” important supply chains away from “countries that present geopolitical and security risks.”
The U.S. also joined with India, the European Union, Saudi Arabia, and the United Arab Emirates to commit to establish the India-Middle East-Europe Economic Corridor “that will secure regional supply chains, increase trade accessibility, improve trade facilitation, and support an increased emphasis on environmental, social, and government impacts.” The IMEC will include a railway providing “a reliable and cost-effective cross-border ship-to-rail transit network to supplement existing maritime and road transport routes.” Along this route participants also intend to enable the laying of cable for electricity and digital connectivity as well as a pipe for clean hydrogen exports. Within the next few months officials will meet to begin developing a plan on how and when to advance the project, which is seen as an effort to compete with China’s decade-plus-old Belt and Road Initiative among the countries of the so-called Global South.
In Vietnam, the U.S. announced that the two countries have elevated their relations to a comprehensive strategic partnership through which they will “continue to deepen cooperation” in a wide range of areas. On trade, this includes a pledge to create favorable conditions and facilitate further market opening for each other’s goods and services, to support regulatory measures toward that end, and to address issues such as market access barriers via the existing bilateral trade and investment framework agreement. They also mentioned other longstanding issues such as economic reforms, exchange rate management, labor rights, and intellectual property rights.
The U.S. noted that Vietnam has recently requested a review of its market economy status in the U.S. (which among other things affects the size of antidumping and countervailing duties on imports from Vietnam) and said it will review this request “as expeditiously as possible.”
The U.S. also announced a new partnership that will further develop Vietnam’s semiconductor ecosystem, regulatory framework, and workforce and infrastructure as part of an effort to build resilient semiconductor supply chains with “reliable partners.”
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