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U.S. Plans to Resume Trade Talks with India as Lawmakers Register Concerns

Wednesday, June 26, 2013
Sandler, Travis & Rosenberg Trade Report

At the fourth annual U.S.-India Strategic Dialogue, officials announced plans to hold later this year the first meeting of the ministerial-level Trade Policy Forum since 2010. To prepare for that meeting the two sides will renew expert-level discussions on trade and investment policy issues. They also indicated a desire to conclude negotiations on a bilateral investment treaty, which were last held in June 2012, “as soon as we can.” Other upcoming bilateral meetings include a July gathering of the U.S.-India CEO Forum that will focus on further developing joint initiatives and priorities and ways to overcome business challenges; the fourth India-U.S. Aviation Summit in October, which will focus on aviation, safety, technology and management; and a meeting of the Information and Communication Technology Working Group in Washington to discuss cooperation on equipment security, manufacturing incentives, cloud computing and enhanced cooperation in ICT-related innovations.

The pledge to intensify discussions comes amid growing discontent among U.S. lawmakers with Indian trade and commercial policies. Despite a nearly fivefold increase in two-way trade since 2000 to more than $100 billion annually, a sizeable number of members of the House and Senate have written to Obama administration officials in recent weeks requesting that attention be given to a range of trade irritants. Forty senators sent a letter to Secretary of State John Kerry June 20 hinting at the need for action at the World Trade Organization in response to “India’s recent actions to force the local production of certain information technology and clean energy equipment and to deny, break or revoke patents for nearly a dozen lifesaving medications.” Two days earlier more than 170 members of the House complained about the same issues in a letter to President Obama and warned that other emerging countries could follow India’s example. The leadership of the House Ways and Means and Senate Finance committees have separately registered their concerns about market access barriers, harmful IPR policies and India’s “increasingly unproductive role in multilateral negotiations” on services, information technology products and trade facilitation. A new association of 15 business groups has been formed to add private-sector support to efforts to address these issues.

The rumblings from Capitol Hill are having an effect, a Reuters article indicates, with new U.S. Trade Representative Michael Froman saying recently that he expects concerns about the investment and innovation environment in India “to be a major early focus of his tenure.” However, he made no predictions as to what actions the administration may take, stating for example with respect to calls to revoke India’s eligibility for the Generalized System of Preferences that “we need to take a careful look at that” in consultation with Congress.

On the other hand, Robert Blake, assistant secretary of State for south and central Asian affairs, said recently that “as we make progress on our bilateral trade and remove some off the irritants, we can then tee up more ambitious initiatives in let’s say an APEC [Asia-Pacific Economic Cooperation forum] or on a free trade agreement.”

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