US Trade Act: India and the United States of America i.e. US seem to be moving towards a trade agreement. Recently, Commerce and Industry Minister Piyush Goyal has said that almost all the discussions for the first round of the proposed Bilateral Trade Agreement (BTA) have been completed. As the talks are entering the final stages, a very important issue is also making headlines.

What is Section 301 of the US Trade Act?

Actually there is a section of the American Trade Act 1974. This is Section 301. Section 301 is used by America to deal with fraudulent trade strategies used by other countries. This provision allows the Office of the US Trade Representative (UTR) to investigate foreign governments and take retaliatory action if their policies are found to be harmful to American businesses or trade interests.

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When can Section 301 be used?

The US can initiate an investigation under USTR Section 301 if it believes a country’s trade policies violate international agreements or disproportionately harm American businesses. Which includes concerns like forced technology transfer, violation of labor rights, large government subsidies promoting excessive production.

Will there be relief from trade agreement?

According to a report in Business Standard, if the two countries reach an interim trade agreement before July 24, the US will likely assure India that no additional duties will be imposed under Section 301. It is noteworthy that without such agreements, countries may have to face very high fees if found violating the provisions of Section 301. That is why India is preparing strategies to protect itself from this section.

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