India,US to talk trade and investment

Written by Rituparna Bhuyan | New Delhi | Updated: Oct 26 2009, 06:49am hrs
Commerce minister Anand Sharma and United States Trade Representative (USTR) Ron Kirk will meet for the fourth time in the past five months in New Delhi on Monday to discuss measures to strengthen trade and investment ties between the two countries. In 2008-09, United States was Indias second biggest export destination and accounted for the third highest investment inflows into the country.

Sharma and Kirk will chair the seventh US-India Trade Policy Forum (TPF), where negotiations on a bilateral investment treaty to promote investment flows will be taken forward, while exploring avenues for co-operation in healthcare and education services, information communications technologies, and energy and environmental services.

The first round of negotiations on the Indo-US investment pact was held in August. While the US is demanding pre-investment national treatment for its investments, India is willing to give that status only for a post-investment scenario. National treatment in the pre-investment stage would mean that Foreign Direct Investment inflows would not be subject to screening by monitoring bodies like the Foreign Investment Promotion Board.

The US is optimistic about the negotiations but realises that certain issues may be challenging. We hope that officials can meet again in the coming weeks to continue discussions In the US view, the focus of this TPF meeting will be the renewal and strengthening of the US-India bilateral trade relationship, Carol Guthrie, assistant United States Trade Representative for Public and Media Affairs told FE.

Sharma and Kirk last met in Washington during the second week of October, where they discussed a range of issues including loss of duty preference by Indias labour intensive exporters under the Generalized System of Preferences (GSP) as well as movement of Indian professionals to the US.

While I cannot say in advance all issues to be discussed, I can say that India is to be commended for its success under the GSP programme. As far as the future, the US Congress currently is reviewing GSP as part of a review of US preference programmes. The Office of the USTR is working with the Congress as it considers ideas for preference reform, Guthrie informed.

Historically, the US has been Indias biggest export destination, but in 2008-09, that position was taken by United Arab Emirates. While India is the largest democracy, US is the biggest global economy and relations between both the nations reached a new height with the signing of the civilian nuclear agreement in October, 2008.

However, on the multilateral trade liberalisation talks, both the nations are often seen locking horns at the Geneva based headquarters of the World Trade Organisation over the Doha Round negotiations. While India wants to protect its poor farmers from import surges in farm goods, the US is seeking additional market access for its industrial goods.

The focus of this visit is primarily on the bilateral relationship between the US and India. However, ambassador Kirk and Sharma have had several productive discussions in the past regarding the Doha negotiations. The September mini-ministerial in New Delhi certainly resulted in renewed energy for the Doha Round. In subsequent weeks, the United States has been pleased to see movement forward on sustained bilateral engagement in additional to multilateral efforts. Such bilateral engagement can help trading partners to assess the nature of gaps that exist and to address them, particularly with regard to market-opening contributions by key emerging markets, Guthrie said.