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U.S., India Look to Strengthen Trade Cooperation Amid WTO Row

Tuesday, August 05, 2014
Sandler, Travis & Rosenberg Trade Report

Following a meeting of the U.S.-India Strategic Dialogue July 31 in New Delhi, both sides expressed a desire to strengthen bilateral trade cooperation even as they clashed at the World Trade Organization on the issues of trade facilitation and food security. More in-depth bilateral meetings on trade issues are expected later this year.

A joint statement said the U.S. and India are hoping to convene a session of the Ministerial Trade Policy Forum (which may address issues such as intellectual property and investment in manufacturing) this fall, plan to expand the U.S.-India Commercial Dialogue (e.g., by promoting innovation in advanced manufacturing), and intend to conduct the next meeting of the High Technology Cooperation Group in India before the end of the year. In the interim, Secretary of State John Kerry welcomed increases in the foreign investment ceilings in several sectors of the Indian economy, including defense, railways, e-commerce and insurance, and the two sides agreed to identify specific areas for investment in India's manufacturing and infrastructure sectors, including through establishing a new initiative in this regard. In addition, U.S. Defense Secretary Chuck Hagel will visit India later this month to “deepen discussions on … defense trade, co-production and co-development.”

The same day officials were meeting in New Delhi, however, India brought to a halt an effort to implement the Trade Facilitation Agreement that WTO members concluded last December. India has insisted on securing an accelerated timetable for addressing its concerns on food safety and agricultural subsidies before voting to add the TFA to the codex of WTO rules, but its demands went unmet as a July 31 deadline for the vote expired. The issue will be tabled during the WTO’s annual August break, and Director General Roberto Azevedo said he will resume consultations in September to seek a way forward. However, he warned that “this is not just another delay which can simply be ignored or accommodated into a new timetable” and that instead it “will have consequences” that “are likely to be significant.” For example, press reports note, there has been some discussion of abandoning the unanimous consent model the WTO has employed since its creation in 1995 and moving the TFA ahead without India.

A State Department fact sheet notes that U.S.-India trade expanded from $19 billion in 2000 to $95 billion in 2013. U.S. goods exports to India totaled $35 billion last year, cumulative Indian investment in the U.S. totaled $9 billion in 2012, and U.S. investment into India exceeded $28 billion. In addition, a new partnership between the U.S. Department of Commerce’s SelectUSA program and the Export-Import Bank of India will work to assist Indian companies and entrepreneurs as they seek to invest and create jobs in the United States.

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