By Amitendu Palit

At a time when global trade discussions are dominated by tariffs, the India-UK Comprehensive Economic and Trade Agreement (CETA) is a notable exception. Tariffs are certainly a part of the CETA. But it is much more than tariffs. The deal exemplifies what modern trade agreements between the world’s major economies should look like, in terms of issues and coverage. The agreement helps in getting both the developed and developing worlds to focus on non-tariff issues that matter most in modern trade. And it also marks India’s entry in big-ticket 21st century modern FTAs.

President Trump’s fondness for tariffs, demonstrated by his calling them the most “beautiful word in the dictionary”, has significantly impacted the global trade discourse by distracting the trajectory of trade liberalisation. From the time the most-favoured nation (MFN) principle of allowing reciprocal access became the key rule in global trade, tariffs began getting phased out. While World Trade Organization (WTO) members, like India, retained the flexibility of raising tariffs under specific circumstances, global trade ran mostly on MFN rates. Bilateral and regional FTAs brought down tariffs even further. The steady decline in tariffs through FTAs made them far less important subjects in trade policy than they were in the 1980s.

The trade liberalisation discourse, till the middle of the last decade, was largely focused on non-tariff market access........

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