Art (And Science) of the deal: Trump and Modi convey positive outcome as trade details hammered out behind closed doors

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At a press conference before moving behind closed doors for intensive discussions between the two leaders of the largest and oldest democracies and their teams of experts at the G-20 Summit in Osaka June 28, President Donald Trump and Prime Minister Narendra Modi put a brave face on the outcome of thorny trade and tariff issues plaguing the bilateral relationship.

When asked about his complaint about Indian tariffs, Trump said only: “We’ll be talking about trade…. It’ll be very positive.”

The U.S.-India bilateral discussions ranged from Iran, to 5G, trade and defence relations, though by the account given by India’s Foreign Secretary Vijay Gokhale, there was not much time left to flesh out defense cooperation in light of the time taken by discussions over Iran, trade and 5G networks.

Discussions About Discussions

Discussions were on about the earliest time that discussions can take place between the technical teams, officials said.

For public consumption, the two sides put out a bland statement reiterating their close relationship and a bright future of close cooperation on all issues ranging from defense and counterterrorism to people-to-people relations were touched upon. On the eve of his departure for Osaka, President Trump received a bipartisan letter from U.S. lawmakers led by Congressman Ami Bera, D-California, that noted the “significant tensions” in recent years, but urged that “These challenges, among other trade disagreements, including over data localization, price controls, and e-commerce demand sustained attention and dialogue given the importance of each country to the other’s economic success,” adding that, ” While our economic relationship may have its ups and downs, it delivers countless jobs and benefits to our two countries,” which promise only to accelerate in the future.

“The talks with @POTUS were wide ranging. We discussed ways to leverage the power of technology, improve defence and security ties as well as issues relating to trade. India stands committed to further deepen economic and cultural relations with USA. @realDonaldTrump,” Modi tweeted.

A senior U.S. administration official briefing the press June 28, however, could not provide details on where the trade discussions with Modi and team India were going and if a deal was imminent.

India was on the same page. “On trade issues negotiations are not done at the level of leaders, so neither time nor the level permitted any discussion on concrete issues,” India’s Foreign Secretary Vijay Gokhale said at a June 27 briefing. “The idea was to clear the air and then to set the agenda for discussions in resolving the trade matters and in that direction both leaders have directed officials to now move forward and I think that is where we found this discussion very open and very productive,” Gokhale added, giving nothing away.

The readout from the White House was in officialise, indicating all was hunky dory just hours after President Trump had denounced India’s tariffs as he left Washington. The statement said the two leaders met “to exchange perspectives on progress in the strategic partnership and develop new ideas to bring it to the next level.  The leaders acknowledged the unprecedented breadth and depth of bilateral ties, including economic, trade, energy, defense and security, counterterrorism, and space.  The leaders affirmed that, as responsible democracies, a close partnership between the United States and India is central to global peace and stability.  They reiterated their commitment to provide strong leadership to address global challenges and build prosperity for their citizens in the decades to come.”

On Iran, Modi laid out India’s energy concerns and it was in New Delhi’s “fundamental interest” to keep peace and stability in the region also because of the 8 million Indians living there.  Although Iran supplies 11% of India’s energy needs, Modi said, his country had reduced oil imports from Iran but these were despite the effect it had on the Indian economy. President Trump expressed his appreciation but also said he hoped oil prices would remain stable and pointed to U.S. efforts to ensure that stability.  Both sides agreed that they would remain in touch on the issue of Iran and we would continue to have mutual discussion on how to ensure regional peace and stability.

On 5G, Modi said it was important to collaborate, to see how the billion Indian users could be leveraged. “The way India moves or the way whatever choices India makes will essentially determine the way the global trend will go,” Modi told Trump, according to Gokhale. The Indian leader also spoke about how India’s capacity in technological development in start-up and design, as well as Silicon Valley’s role in developing 5G technology for mutual benefit.

President Trump welcomed this idea and pointed to the work American companies are now doing in 5G, and specifically referred to Silicon Valley and said that since he had taken over as the President of United States he has focused on this area, on developing America’s capabilities in technology.

Both leaders aired their concerns on trade differences “and what was agreed was that the trade ministers of both countries would meet at an early date and would try and sort out these issues,” Gokhale said. Modi also acknowledged India had taken steps in retaliation to U.S. ending India’s special trade status under the Generalized System of Preferences. But those steps had been taken and “now we should now look forward and we should see how we can resolve some of these issues,” Modi said, according to Gokhale’s account.

Agile Foreign Policy
The bilateral meeting received an added boost with the trilateral Japan-India-America Trilateral Summit Meeting, during which discussions on the Indo-Pacific region and maritime security and issues of improving connectivity and infrastructure development transpired.

Japan’s Prime Minister Shinzo Abe called the three countries the “foundations of peace and prosperity in the region.”  The leaders agreed to meet annually and “to ensure successful cooperation in multiple areas, including maritime security, quality infrastructure, and advancing peace and prosperity in the Indian Ocean and Pacific region and beyond,” according to the White House.

But differences between India and countries like Japan and the U.S. emerged during the G-20 Summit on issues like reform of the World Trade Organization, or data-localization, where India has mandated the storage of financial data including that of multinationals like Google, Amazon, MasterCard etc., be kept on servers in India.

Modi appears to have stood his ground according to Indian officials briefing the media, arguing that financial data was a “new form of wealth” and the “requirements of developing countries,” must be kept in mind, The Hindu reported. That appears like a bridge that may not be crossed at the bilateral negotiations.

“The United States opposes data localization and policies, which have been used to restrict digital trade flows and violate privacy and intellectual property protections,” Trump asserted at the Special Session on the Digital Economy.

Add to that, India’s stand on 5G technology, where New Delhi plans to begin trials later this year, even as Trump has called for banning Huawei’s 5G network on grounds it could be used for spying.

Meanwhile, Modi exhibited his country’s agile foreign policy that demonstrated New Delhi’s to meet some of its trade and development needs from multiple sources, as the Indian leader breezed through bilateral meetings with heads of state of Russia, China, South Korea, Germany, Canada and a host of other countries at the G-20 Summit.

About his meeting with President Putin of Russia and Xi Jin Ping of China, Modi said, “Friendly nations, futuristic outcomes. The RIC (Russia-India-China) meeting was an excellent forum to discuss ways to enhance multilateral cooperation between our nations and work to mitigate challenges being faced by our planet, most notably terrorism and climate change.”

With Germany’s Angela Merkel, Modi said his discussions held “immense scope” for stronger relations, especially in areas such as technology and infrastructure. “Deepening cultural ties is also a key focus area,” Modi tweeted.