The view from China

US-China relations

Earlier this month, Presidents Xi Jinping and Joe Biden held a virtual meeting together. However, this important détente was upstaged by the US and China agreeing to deepen climate change cooperation during the COP26 Summit. Whilst both the virtual meeting and climate cooperation agreement are positive signs, the broader bilateral relationship remains as frosty as ever.

Indeed, just days after the two leaders spoke President Xi made it clear at an ASEAN Summit that China offered the SE Asian region the best trade and investment relationship considering the recently concluded US-UK-Australian AUKUS security agreement.

UK engagement in the ASEAN region

Following the UK’s formal application to join the CPTPP free trade agreement earlier in the year Britain became the first country in 25 years to become an ASEAN dialogue partner.

As a result, we’ve seen active engagement from its diplomatic team based in Jakarta to engage more closely with the ASEAN region and indeed UK Foreign Secretary Liz Truss visited Indonesia last week.

A government initiative to increase UK exports to £1 trillion was also launched by DIT (Department of International Trade) in November.

It is also now highly likely that there will be bilateral meetings between the UK and Chinese governments in mid-January.

In addition to focusing on ‘Beyond COP’ initiatives at the Joint Economic and Trade Committee (JETC) bilateral sessions, British business will be looking for more signs that China is opening up its domestic markets.

Lockdowns and quarantine-free travel

It is looking increasingly likely that whilst the CBI Beijing team will remain locked down in the capital through to the start of the winter Olympics in February 2022, the rest of the region will continue to open up.

Just last week Singapore announced that it was adding Indonesia, India and Qatar to a growing list of countries that can travel in and out of the city state quarantine-free. Japan is also likely to allow business travel and general tourism to resume soon whilst Thailand has already re-opened its borders, albeit with strong restrictions still in place.

The CBI Beijing team and our partners are continuing to lobby for the resumption of direct flights between the UK and China.

The view from India

Indian ambition at the COP26

Prime Minister Narendra Modi announced at COP26 that India will achieve its net zero targets by 2070. India’s solar energy capacity has increased 17 times in seven years, while there was a 24% reduction in emission intensity of India’s GDP over the period 2005-2014.

The UK and India has launched the global solar grid project: Green Grids Initiative – One Sun One World One Grid. The project will bring together stakeholders including governments and businesses to build the foundation for global access to sustainable energy.

PM Modi and Boris Johnson also discussed ways to improve cooperation in sectors like green hydrogen, renewable energy, clean technology, economy and defence.

Reforms galore

First proposed by the Indian government in 2018, the personal data protection bill has been pending for close to three years now. It directly impacts businesses and foreign entities such as Visa, MasterCard India, Google India, Paytm, Facebook, Twitter and Amazon and others. These entities had expressed concerns over protectionist data protection laws and made various submissions to ease operations. In the ongoing Winter Session of the Parliament, the new data protection bill will be tabled.

On 19 November 2021, Prime Minister Modi announced that the government has decided to repeal the three farm laws – as the government has failed to convince a section of farmers about the efficacy of these laws. The introduction of the laws was at the centre of protests across the nation for the past year in India.

The government will introduce the much awaited ‘Cryptocurrency and Regulation of Official Digital Currency Bill 2021’, with the crypto industry awaiting positive regulation that may permit investing and trading in crypto with certain restrictions. But the reaction to the bill has been mixed. Last week, confusion and panic gripped the crypto market in India as the wording of the bill repeated the government’s intention to ban private cryptocurrencies. However, opinions are divided as to what the government means by using the term private cryptocurrency. The Bill also includes a proposal for a central bank digital currency (CBDC) backed by the RBI to regulate cryptocurrency.

India’s stance at the WTO

With the 12th ministerial of the World Trade Organization (WTO being deferred indefinitely due to the emerging COVID-19 situation, the fate of several critical issues relevant to developing countries, particularly India, hangs in the balance. India will continue to work with other developing nations and press for key demands, including a patent waiver to manufacture COVID-19 vaccines, and other key reforms.

The US-India Trade Policy Forum resumes after four years

The US Trade Representative Katherine Tai visited New Delhi recently to set the tone for trade cooperation between India and the US during the Biden term, and to resume the Trade Policy Forum (TPF) after four years. In a joint statement, the two countries agreed to work together in developing secure trade and technology supply chains, with a special mention reserved for pharmaceutical manufacturing and health-related products and services. They also agreed to resolve concerns surrounding market access for agriculture and food products, tariff reductions and the restoration of India's status under the U.S. Generalized System of Preferences (GSP).

The GSP program includes tariff concessions provided by wealthy nations on exports from developing and least developed countries. India had exported goods worth $6.3 billion to the U.S. under the GSP program in 2018 before the Trump Administration terminated the tariff benefits to India in June 2019.

The view from the USA

Engaging with the US State of Minnesota

The CBI international trade team hosted a successful in-person member roundtable with Tim Walz, Governor of the US State of Minnesota, on 16 November at the CBI’s offices in London. The Governor discussed his priorities for US-UK trade and investment and how he sees sectors such as sustainability and advanced manufacturing to be poised for future growth. For more information on the event or to hear more about opportunities in the state of Minnesota, please get in touch.

New podcast series on opportunities for UK firms in Latin America

The CBI Washington office has partnered with its network in the Latin American business and government community to launch a podcast series on trade and investment opportunities for UK firms in Latin America. Produced exclusively for CBI members, this series will look to educate and inform members about how they can take advantage of the enormous potential that these markets present in the 21st century economy.

FTA negotiations with Canada and Mexico

CBI Washington continues to engage with the UK Department for International Trade about the state of negotiations for new bespoke trade agreements with Canada and Mexico. Securing member feedback ahead of these negotiations will be a top priority for the CBI as we enter 2022. To make your priorities heard on the Canada or Mexico deals or to discuss these negotiations, please get in touch.