The Hindu Business Line : `US-India taking a wise approach to bilateral trade engagement'

"What we are doing is to see what we can do sector-by-sector to deepen and strengthen the bilateral trading relationship. This is what we have done with other trading partners before we launched something like an FTA... " — MR KARAN K. BHATIA, DEPUTY US TRADE REPRESENTATIVE

"I am encouraged by our bilateral dialogue with India to take a measured but dedicated approach to increasing and strengthening bilateral ties. We are not setting some comprehensive negotiations in place, which has the effect of putting pressure on the relationship," says Mr Karan K. Bhatia, Deputy US Trade Representative.

In an interview during a visit to Chennai, he dealt with a number of trade issues, including the growing Indo-American bilateral relationship. Mr Bhatia, who holds a bachelor's degree from Princeton University, a Master's from the London School of Economics and a law degree from Columbia University, was confirmed as the Deputy US Trade Representative in November 2005. His portfolio includes overseeing trade relations with East Asia (including China and Japan), South Asia, South-East Asia and Africa.

Excerpts from the interview:

On the US-India Trade Policy Forum and whether it could lead to a bilateral agreement:

In Delhi, I had bilateral meetings with my counterparts in the various economic ministries. We had a meeting of the bilateral US-India Trade Policy Forum, which is the principal mechanism by which the United States and India are addressing trade policy issues. The meetings addressed the full range of trade and investment issues. We have formed five working groups — on agricultural trade; trade in industrial goods (both tariff and non-tariff barriers); innovation and creativity (IPR); services and trade in services; and investment issues. We took stock of the developments in these areas and also talked about some pressing issues that we would like to have addressed before the next meeting of the ministers.

Let me list some of the issues of concern for you. First, market access in a variety of sectors is important. Which means in the agriculture sector making sure that the sanitary or phyto-sanitary (SPS) requirements that are applied by India do not unreasonably restrict US trade in agricultural goods to India. New Delhi has the same set of concerns with us. India has agricultural exports that it wants to make sure can access the US market.

In the industrial products area, there are issues such as the ability of US motorcycle manufacturers to be able access the Indian market. We produce certain line of heavy motorcycles that are attractive to leisure riders, for instance. That is an area that we have been speaking with our Indian colleagues about. It has to do with both tax and emission norms.

There are issues of reform in FDI (foreign direct investments) restrictions in other areas. For instance, the insurance and the financial services sector. We want to make sure that in the telecommunications sector the significant movement by India in opening up that sector to greater FDI is followed through.

The US and India have a lot in common in strong intellectual property rights. Both have substantial knowledge-based industries. Making sure that there is good cooperation in achieving gold standard IPR regimes and effective enforcement of those regimes, is a strong interest in both countries.

Even where we have disagreements with India we are trying to work them in a way that there is reasonable accommodation. The US and India are taking a wise approach to their bilateral trade engagement. What we are doing is to see what we can do sector-by-sector to deepen and strengthen bilateral trading relationship. This is what we have done with other trading partners before we launched something like an FTA (free trade agreement) or a comprehensive negotiation. I don't mean to suggest that that (an FTA) is in the offing.

On the India-US nuclear deal and its impact on trade:

It is an encouraging development for US-India economic ties. The civil nuclear deal shows that our relationship has reached a level of trust and maturity. The deal will not only benefit trade in civil nuclear items, but also stimulate trade in high technology items. As recently as a decade ago, India looked at the US as a less than secure supplier and the US looked at India as a potentially less-than-secure destination. That has been completely turned around, where now the US and India trust each other.

This civil nuclear deal opens up the opportunity for sharing of technology and for commercial interaction. This will have effects in other areas as well. There will need to be financing for these, there will need to be services and goods supply that will benefit both Indian and American suppliers of these goods and services. It is a big step forward.

On US' trade policy — bilateral agreements, trade and investment framework agreements... :

All our agreements are WTO-consistent. We continue to work for a successful Doha Round while strengthening important relationships bilaterally. In those cases where we are successful in strengthening the bilateral trading relationships, our bilateral partner becomes a partner in the multilateral sphere as well. With respect to India, we are, through this Trade Policy Forum, trying to address tariff and non-tariff barriers that impede trade and investment relations. After we are successful in doing that, I think not only will we grow the US-India bilateral trade relationship, we will increase and strengthen the US-India partnership in regional and multilateral fora as well.

Largely it is SPS requirements that can impede trade. Wheat is one area. India has acquired substantial amount of wheat this year through international tenders. US companies unfortunately have not been able to bid because the Indian requirements on wheat contain low tolerances. We believe that the US wheat is globally safe. We know that if US companies could compete to supply wheat it could save the Indian taxpayers lot of money. We are competitive in the wheat area. We would like to work out a resolution in these SPS issues that will permit the US to join other countries in bidding for contracts.

On the Doha Round:

What you see coming out of Geneva is suggestions for more technical level discussions. The US is prepared to work constructively with our trading partners to try and see a successful Doha outcome, which is going to depend upon all our major trading partners taking a step forward together. Agriculture is going to be the key to resolving the round. There is a lot to be gained for India and the United States in the other sectors as well. We would have to address all these issues. The US put a bold proposal on the table where we called for movement on at least three big areas - in the elimination of export subsidies, in the reduction of domestic support for agriculture production and in substantial new market access for agricultural commodities. We continue to believe that those three elements are going to have to be part of any successful Doha package. A successful outcome needs to involve not only the EU, but also the rapidly advancing emerging economies, including India, China, or Brazil.

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