BIDEN, MODI TO DISCUSS UKRAINE, IPEF: India, which is heavily reliant on Russia for energy and military equipment, has not joined the United States and other Western economies in imposing sanctions on Moscow and has tried to remain somewhat neutral in the conflict. However, U.S. officials have been courting India's cooperation in recent weeks. The leaders' meeting coincides with the fourth U.S.-India 2+2 Ministerial Dialogue, also being held today. That will be led by U.S. Secretary of Defense Lloyd Austin and Secretary of State Antony Blinken and their Indian counterparts, Defense Minister Rajnath Singh and External Affairs Minister Subrahmanyam Jaishankar. The China card: The hardest issue India now faces is how quickly it "can be helped by the rest of us to get out of these legacy relationships," whether it's their dependency on certain kinds of oil and other energy products from Russia or military equipment, Victoria Nuland, under secretary of state for political affairs, told NPR. Nuland said one point she stressed to Indian officials on a recent trip to New Delhi is "Russia is increasingly aligned with China. So should India come into conflict with China, it can't count on Russia being in its corner." Deputy National Security Advisor for International Economics Daleep Singh also visited New Delhi in late March to discuss the U.S. sanctions on Russia and how the two countries could cooperate on addressing global food insecurity and global energy prices. More importantly perhaps for Morning Trade readers, "Singh and his counterparts also advanced ongoing discussions about the development of an Indo-Pacific Economic Framework," the White House said in a readout. Will India be in the IPEF?: The Biden administration still has not identified which countries will participate in the IPEF, although talks could potentially begin next month. The proposed deal is not like a traditional free trade agreement since the Biden administration has ruled out offering any U.S. tariff cuts to entice other countries to make meaningful commitments in areas including labor; environment and climate; digital economy; agriculture; transparency and good regulatory practices; competition policy; and trade facilitation. It also will be jointly negotiated by USTR and the Commerce Department, and countries can choose which of four modules to join. The three spearheaded by Commerce Secretary Gina Raimondo are clean energy, supply chains, and tax and anti-corruption, with everything else jammed in USTR Tai's module on "fair and resilient" trade. India's participation in one or more of the four sections would raise new questions about what the proposed agreement could achieve and whether New Delhi would go the distance to become part of any final deal. Tai, in testimony before the Senate Finance Committee, recently described the U.S.-India relationship as both "strategically important" and "quite challenging." She will meet on Tuesday with Jaishankar, who is in Washington for the 2+2 ministerial. India was part of the lengthy talks on the Regional Comprehensive Economic Partnership, but opted out of signing the final agreement. That pact includes China, Japan, South Korea, New Zealand, Australia and the 10 members of the Association of Southeast Asian Nations. New push with EU: Talks between the EU and India on a free trade agreement stalled in 2013, after six years of negotiations, although both sides agreed last year to pick them up again. India also recently signed an interim trade deal with Australia and is in talks with the U.K. Still, India's reluctance to take on binding new multilateral commitments at the World Trade Organization has long frustrated the United States. New Delhi also is a leading opponent of "plurilateral" deals being negotiated among subset of WTO members to get around the ability of a small group of countries to block any agreement from being reached. Two-way trade between the United States and India has more than doubled over the past 10 years, reaching more than $110 billion in 2021. However, the U.S. trade deficit with India has also more than doubled over the same period to $33 billion last year. BIDEN TOUCHES BASE WITH SOUTH AFRICAN LEADER: Biden's virtual meeting with Modi today will be his second contact in just a few days with the leader of another country involved in delicate negotiations in Geneva over whether to waive patent protections for Covid-19 vaccines. The first was with South Africa President Cyril Ramaphosa on Friday. The back-to-back calls come as the Biden administration is facing bipartisan criticism over its handling of the Covid-19 vaccine patent negotiations . Republicans in particular have raised concern the vaccine blueprints could be shared with Russia and China since South Africa and India have joined with those countries to establish the BRICS Vaccine R&D Center. Both India and South Africa also abstained from last week's vote to suspend Russia from the United Nations Human Rights Council. It was the third time since early March that South Africa had abstained from a U.N. resolution criticizing Russia. The view from SA: South Africa believes Russia's invasion of Ukraine is a violation of international law and also decries the humanitarian crisis caused by the war, International Relations and Cooperation Minister Naledi Pandor told reporters last week . But it does not think criticizing Russia at the UN will help resolve the situation, she said. Despite that disagreement, both the White House and Ramaphosa mentioned the possibility of increased bilateral trade cooperation. "I had a productive call with US President @JoeBiden earlier this evening," Ramaphosa wrote on Twitter. "As part of deepening relations, we agreed to set up a team to strengthen trade, increase investment in infrastructure and work to tackle climate change." TAI, VESTAGER DISCUSS TTC PREPARATIONS: The next meeting of the U.S.-EU Trade and Technology Council will be held near Paris on May 15-16, the EU's chief digital affairs official, Margrethe Vestager, tweeted on Friday one day after POLITICO reported the same. She also told reporters after meetings with Tai and Raimondo that EU's antitrust regulators are "actively following up" on a complaint by European cloud players who feel they are being boxed out by U.S. tech giant Microsoft. The French company OVHcloud has accused Microsoft of abusive licensing terms, while the German firm Nextcloud is concerned about the bundling of Microsoft's OneDrive products and services with the Windows operating system. USTR stresses the positive: USTR's readout of a meeting Friday morning between Tai and Vestager gave little indication of any trade frictions, despite U.S. business community concern that the EU's Digital Markets Act unfairly targets big U.S. tech companies. Both Tai and Vestager "agreed that U.S.-EU cooperation in the Trade and Technology Council has been excellent to date, and that this cooperation has been instrumental to the strong, united transatlantic response to Russia's unjustified and unprovoked attack on Ukraine," USTR said. Spanish olive mystery: A readout of the meeting between Tai, Deputy USTR Jayme White and Spanish Minister of Industry, Commerce and Tourism María Reyes Maroto, did not mention a hard-fought dispute over U.S. anti-dumping and countervailing duties on Spanish olives. A WTO panel in November found that the Commerce Department violated global trade rules in the way it calculated the final subsidy rate for one of the firms involved in the case and by relying upon a provision of the Tariff Act of 1930 to attribute benefits to downstream agricultural processors. The panel also found that certain factual findings related to Commerce's specificity determination were inconsistent with the SCM Agreement, according to USTR. The United States agreed in December not to appeal the panel's report, but it's still not clear what steps it is taking to comply with the ruling. A USTR spokesperson did not respond on Friday to a question on that topic. FINAL CALL FOR IPEF COMMENTS: The Biden administration's public comment period asking for advice on what should – and should not – be included in the proposed IPEF deal ends today, in another sign that talks could begin soon. The Regulations.gov website says that USTR had received over 1,000 comments on its portion of the IPEF negotiations, although none seemed to have been posted online as of Sunday. A smattering of comments from BSA | The Software Alliance, the Motion Picture Association, Pharmaceutical Research and Manufacturers of America and a few other groups have already been received and posted in response to the Commerce Department's separate request for input. NEXT UP IN U.S.-U.K. TALKS: The second trade dialogue between the U.S. and U.K. has been penciled in for April 25 and 26 in Aberdeen, Scotland, our London colleague Graham Lanktree says he has been told by folks in the know. Sounds like the perfect spot for officials to visit a distillery now that tariffs on whiskey have been lifted on both sides. U.K. to cut all tariffs on Ukrainian imports: The U.K. has pledged to cut all tariffs on goods from Ukraine to help it rebuild after the Russian invasion. British Prime Minister Boris Johnson made the promise during a surprise visit to Kyiv over the weekend where he held talks with Ukrainian President Volodymyr Zelenskyy. The details of the tariff arrangement are still to be worked out, but U.K. officials expect it to last around 12 months, our London colleague Emilio Casalicchio reported. The move could put pressure on the EU and other western nations to follow suit. Last week, a pair of U.S. senators urged Biden to lift Section 232 tariffs on Ukrainian steel exports to the United States. MORE COUNTRIES JOIN EXPORT CONTROL ACTION: Four more European nations — Iceland, Liechtenstein, Norway, and Switzerland — are now part of a multilateral export control coalition aimed at denying Russia and Belarus access to cutting-edge technologies. They join the United States, Australia, Canada, Japan, South Korea, New Zealand, the U.K. and the 27 nations of the EU, the Commerce Department said. BIS publishes final rule: The department's Bureau of Industry and Security has issued a final rule making it even harder for Russia and Belarus to obtain certain U.S. and foreign commodities, software and technologies. The new regulation imposes "highly restrictive license requirements" on all categories of items on the Commerce Control List. Those cover "almost any sensitive dual-use technology, software, or commodities that could be used to support Russia's war effort," BIS said. The U.S. is effectively cutting off Russia and Belarus' access to the items by also applying a policy of denial to license applications, BIS said.
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