What can the US offer besides averting new tariffs?

Beyond a first tranche, the negotiation of this BTA will be unprecedented in many ways. In fact, the title itself leaves a lot to the imagination, which may provide some impetus for creativity, always a precious commodity in trade negotiations. Despite what I have heard from some commentators, the term BTA is somewhat unique. It is not a free trade agreement (FTA), and previous bilateral efforts to negotiate have never involved an FTA, at least in the classic WTO definition involving eliminating tariffs on "substantially all trade," and in the US Congressional definition, which requires legislation providing trade negotiating authority.

Leverage is the key ingredient in any trade negotiation, and the Trump administration has it in spades with its threats of radically higher tariffs. Empty or overly provocative threats, particularly between major economic powers, can backfire, but for the moment it is best to assume that each side is highly motivated to conclude a substantial, wide-ranging trade agreement. While the Trump administration may have an ambitious agenda to address its concerns with India’s trade-restrictive measures, India should have its agenda for US commitments as well. A BTA must be a win-win.

Aside from market access in the form of tariff concessions, a BTA can include specific chapters that are common to many past US FTAs, including TBT, SPS, trade capacity building, and so on. Agreement on these areas and others could address some of the NTBs that India may request in specific sectors. A BTA could also offer enhanced commitments on services beyond those in existing WTO agreements. It could include completely new areas of trade, such as provisions on high-tech matters, supply chain resilience, health sector collaboration, etc., as Ken Juster and I laid out.