Trade negotiations: The art of trade negotiation is often the art of creating FOMO, the fear of missing out. Countries do not enter every trade agreement because the deal is perfect. They enter because staying outside a preferential arrangement can become costlier than accepting an imperfect one.
Lloyd Gruber captured this logic in Ruling the World: Power Politics and the Rise of Supranational Institutions. His discussion of NAFTA showed how power can work through exclusion. Mexico’s best option may have been no NAFTA. It could have remained the cheapest manufacturing base in North America, exporting to the United States and Canada while retaining more policy space at home.
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But once the United States and Canada moved towards deeper integration, Mexico’s choice changed. If Washington and Ottawa lowered barriers between themselves and Mexico stayed out, Mexican exporters risked losing relevance in the North American production system. Joining NAFTA carried costs. Staying out could have been worse. That is the logic of FOMO in trade negotiations.
Trade negotiations and exclusion
A similar dynamic is visible in Canada’s dealings with ASEAN. Canada is negotiating a region-wide ASEAN-Canada free trade agreement. Canada and ASEAN agreed to launch those talks in November 2021, and trade ministers have aimed at substantial conclusion.
Ottawa has also moved through overlapping bilateral channels. Brunei, Malaysia, Singapore and Vietnam are already linked to Canada through the CPTPP. Canada and Indonesia signed a Comprehensive Economic Partnership Agreement on September 24, 2025. Canada has also begun bilateral FTA processes with the Philippines and Thailand.
That leaves Cambodia, Laos and Myanmar outside the emerging preferential network. The pressure is quiet. Countries with access get lower barriers and greater predictability. Those outside risk losing competitiveness against neighbours in similar export sectors.
US tariff diplomacy turns harder
The United States is using a harder version of the same logic. Washington has negotiated separately with export competitors and created tariff differentials that make each country worry about the deal others may get. The point is not only to liberalise trade. It is to make countries compete for preference.
Executive Order 14257 of April 2, 2025, created the reciprocal tariff framework. Subsequent amendments and negotiations sharpened the country-by-country pressure. Vietnam, a major exporter of electronics, footwear, furniture, apparel and consumer goods to the United States, faced a 46% shock. Bangladesh, dependent on garments, faced severe exposure at 37%. India’s tariff was later described by Washington as being reduced from 25% to 18%.
The difference of a few percentage points matters. Buyers of T-shirts, footwear, tumblers and basic home goods can shift orders. These are not specialised semiconductors. They are labour-intensive products with multiple sourcing options.
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Vietnam therefore had reason to move quickly. On October 26, 2025, the United States and Vietnam announced a framework under which Washington would maintain a 20% reciprocal tariff on Vietnamese-origin goods and identify some products for zero reciprocal tariff treatment. Vietnam agreed to provide preferential market access for substantially all US industrial and agricultural exports, and to address non-tariff barriers, digital trade, services, investment, intellectual property, labour, environment, customs and supply-chain resilience. The deal also noted a Vietnam Airlines purchase of 50 Boeing aircraft worth more than $8 billion and Vietnamese company memoranda for more than $2.9 billion of US agricultural commodities.
Bangladesh protects garments
Bangladesh followed in February 2026. The United States and Bangladesh announced a framework reducing the reciprocal tariff on Bangladeshi-origin goods to 19%. The agreement also created possible zero reciprocal tariff treatment for some textile and apparel goods linked to the use of US-produced cotton and man-made fibre inputs.
This mattered because Bangladesh’s US export story is overwhelmingly garment-driven. A 37% tariff would have been devastating for exporters competing on thin margins. A 19% rate still hurts. But it keeps Bangladesh in the US sourcing game.
Bangladesh paid for that protection. It agreed to expand access for US industrial and agricultural exports, including chemicals, medical devices, machinery, motor vehicles and parts, ICT equipment, energy products, soy, dairy, beef, poultry, tree nuts and fruit. It also accepted commitments on US vehicle standards, FDA-certified products, remanufactured goods, labour, environment and future purchases of US aircraft, agricultural, energy and military products. Reuters reported anticipated deals of more than $18 billion.
India’s tariff edge
India’s framework came in the same February window. The February 6, 2026 US-India joint statement said Washington would apply an 18% reciprocal tariff on originating goods of India, including textiles and apparel, leather and footwear, plastic and rubber, organic chemicals, home décor, artisanal products and certain machinery. Subject to successful conclusion of the interim agreement, it also contemplated removal of reciprocal tariffs on goods listed in the aligned partners annex, including generic pharmaceuticals, gems and diamonds, and aircraft parts.
A separate US fact sheet described the move as reducing India’s reciprocal tariff from 25% to 18%. India also committed to reduce or eliminate tariffs on US industrial goods and a wide range of food and agricultural products.
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If India preserves an 18% rate while Bangladesh sits at 19% and Vietnam at 20%, India gains a modest but visible edge in textiles, apparel, leather, footwear, home décor, artisanal products, machinery and some chemicals. It also helps India’s ambition to attract labour-intensive supply chains moving out of China.
The scale is not small. US goods imports from India reached $103.8 billion in 2025, up 18.9% from 2024.
Bangladesh’s 19% rate preserves its garment position. Without the reduction from 37%, India and Vietnam would have gained from diverted garment orders. India could have picked up cotton garments and home textiles. Vietnam could have gained in higher-volume apparel and footwear.
This is how FOMO works. India wants to avoid losing orders to Vietnam’s manufacturing depth and Bangladesh’s garment strength. Bangladesh wants to avoid being priced out by India’s slightly lower tariff and Vietnam’s sourcing ecosystem. Vietnam wants to avoid future investment moving to India or lower-cost garment orders shifting to Bangladesh.
Trade negotiations are about fear
Where things stand now, Vietnam and Bangladesh have announced frameworks at 20% and 19%. India has an announced 18% framework, but the interim agreement remains under negotiation. Reuters reported on June 5, 2026 that the first tranche of the India-US trade deal could be concluded by mid-July, after talks slowed when the US Supreme Court struck down broad tariff measures.
The lesson is simple. Modern trade negotiations are not just about who gets access. They are about who fears losing access first.
That fear can move governments faster than economic theory, and often with less resistance at home. FOMO is not a slogan. It is a bargaining instrument.