New Delhi, Oct. 25 Ahead of the India-US Trade Policy Forum on Monday, the visiting United States Trade Representative, Mr Ron Kirk, is keen on pushing for a rigorous bilateral investment treaty between the two countries. This, he said, is bound to promote reciprocal investment flows and lay a solid foundation for a “robust relationship.”
Amid his busy schedules on the day he landed in Delhi for a sojourn, Mr Kirk gave his take on a host of issues that govern bilateral commercial and strategic relations between the world’s “two largest democracies sharing a lot of similarities.”
Dismissing the allegation that the Obama administration is more protectionist, Mr Kirk quipped, recalling a saying in the US, “What you do is more powerful than what you say. But in the global world, I have to say, what we do is more powerful than what other people say.”
He recalled the US President, Mr Barack Obama’s commitment that the US will not step back from its commitment to free and fair trade, and pointed out that major trade agreements signed in the last 40 years were all done during the Democratic governments of Kennedy and Clinton.
Excerpts from the interview:
On the US-India Trade Policy Forum:
By being here, I hope this is the manifestation of the extraordinary interest and excitement that we in the US have about strengthening the bilateral relationship with India. We have the opportunity with the Prime Minister, Dr Manmohan Singh’s impending visit to the US later this month to help build a framework that can guide mutual investment between the US and India.
Tomorrow’s meeting is an important step in that for those in government, anytime we can meet with business community that really works on the ground in making that investment.
We have an opportunity to work in a much more powerful and directed manner. In the short-run, we have to strengthen this relationship to build on the good stock we have in putting in place a more rigorous bilateral investment treaty because that will guide to deal with many of the specific irritants we have.
Investment avenues
For India, we are the second export market; but for us, India is 18th. Looking at the extraordinary potentials of India’s economy, from our side, we can see no reason why India cannot be one of the top 10 trading partners.
We want to work on that and within that, what are the areas for enhanced trade? A lot of cross-sectoral investments in information technology exist and so, we think of spinning off from that in terms of health care, education, services, information technology. Even as it relates to climate change, the world begins to look more at trade in environment goods and services in what we call in the US ‘low hanging fruit’, these are some easier areas where both the US and India can open up and create more access not only for US businesses and India but reciprocally as well.
Bilaterally, a wide range of services sectors, including financial services, banking and engineering and, down the road, legal and accounting services, need to be opened up.
The services sector is the strongest part of the US economy, accounting for 75 per cent of our GDP. Obviously, we would love to come and compete on a fair playfield in an economy that has this much potential for growth.
Getting closer
In just the last eight months, we have had high-level visits from US Cabinet members including the Secretary of State, Ms Hillary Clinton. President Obama welcoming Dr Singh is another manifestation of a very real interest in a more robust relationship.
One, we hope,through our work with the TPF (Trade Policy Forum) tomorrow, to come to a closer position to bring to a successful conclusion a bilateral investment treaty that would guide the overall investment.
Second, we have an opportunity to raise some specific issues with India; we can do (it) right now that would help open up the market here and increase trade flows from the US side and India.
For instance, we agreed to import mangoes from India and export Harley Davidson motorcycles here. That is what the political trade (is about). But we buy mangoes that are free to flow into the US. On the other hand, there is not one single Harley Davidson motorbike sold in India.
This is not defensible, particularly as Harley Davidson makes a product for which there is no domestic threat. Removing some of the tariffs on those products in which there is no competitive industry in India stands to common sense and promotion of trade.
We have not had any discussion on a Free Trade Agreement with India, but I think anyone studying the US trade policy will understand that a precursor to it in many cases is a trade and investment framework to be in place. In India's case, a bilateral investment treaty, which sets the framework for immediate investment from both sides, and we think that the work we began on this is the most articulate step.
Source : Business Line