By Arun Kumar, IANS
Washington: India has advised the US to look for “convergence of respecting each other’s sensitivities” as three senior US officials asked New Delhi to take the lead in pushing the stalled Doha round of world trade talks.
“There has to be a convergence of respecting each other’s sensitivities,” Indian Commerce Minister Kamal Nath said late Wednesday as US Trade Representative Susan Schwab suggested it was New Delhi’s responsibility to do so even if it entailed some sacrifice on its part.
“And I want to assure you from here, that Susan and I will find that convergence,” Nath said during a panel discussion in the concluding session of US-India Business Council’s 32nd anniversary “Global India” summit here.
In the first encounter between the two since trade talks broke down last week among Indian, US, European Union and Brazilian officials in Potsdam, Germany, Nath said India was all for a rule-based multilateral trade system and subscribed fully to the World Trade Organisation (WTO).
India is unwilling to offer substantial new agricultural market openings due to concern for its 600 million subsistence farmers and points to US’ own reluctance to reduce its farm subsidies.
Tariffs alone were not the issue, but at stake were the rules of the game, Nath said. It was important that the economies of developing countries become healthy and remain healthy, he said, for otherwise market access would be of no use to them.
“How do we ensure healthy economies that lie at the heart of global competitiveness,” Nath asked, asserting that subsidies have to be removed milestone by milestone, as there was no social net in developing countries to take care of dislocations wrought by such steps.
India was equally disappointed at the failure of four major trading powers to agree on how to take the Doha round forward as in the long-term all stood to gain, said Nath, asking the US to forge a deeper relationship with India by listening to each other.
Earlier Schwab said India had a special role as a Doha round leader for developing countries to act on behalf of poor countries, not just in its own interest. “How India relates to the world and vice versa will have a profound effect.”
Emerging trade giants like India, Brazil and China had a clear responsibility to maintain the international system, she said, describing the import of Indian mangoes by the US as a “shining example of a win and win”.
Schwab stressed the need to improve investment climate in both directions, turn the dialogue on intellectual property rights into action, respect agriculture sector and exploit new opportunities in manufacturing and service sectors.
It was also critical to strengthen their relationship in the strategic sector of nuclear energy and defence, as these two areas are the “heart and soul of our national security,” she said.
Both Nath and Schwab highlighted the two countries’ bilateral commerce, but Nath cautioned that though US was still India’s largest trading partner, others like the European Union and China were fast catching up.
In her keynote address, US Secretary of State Condoleeza Rice said, “failing to realise the promise of Doha would be a historic missed opportunity…. It would be a tragedy and a true shame if we did not complete this historic agreement. And I hope that working together, we can make it possible to do so.”
In a similar vein, US Commerce Secretary Carlos Gutierrez suggested India, Brazil and other large developing countries “need to step up” in world trade talks and make the market-opening concessions to reach a deal.
“In our view, India can do more,” he said, urging India to also open its market to US wheat and further reduce tariffs on manufactured goods.
“The only major country where American farmers cannot export wheat is India… Ultimately, we believe Indian consumers pay the price. This year, the Indian government will pay tens of millions of dollars more because of these barriers to American wheat,” Gutierrez said.
“We are willing to make difficult choices, but we have a shared responsibility to make the round a success and in our view, India can do more,” Gutierrez said. “Large developing countries like India and Brazil, we believe, need to step up.”
India will benefit greatly from an ambitious Doha outcome. It is in India’s national interest to be a leading voice in the developing world, a voice that steps up and offers real reform and real progress at the Doha Development Round, he said.
Seeking removal of remaining “significant restrictions on American investment in India,” Gutierrez said allowing greater foreign participation in pensions, insurance, banking, and multi-brand retail in India will bring greater efficiencies, better prices, new products, and more choices to Indian consumers.
Describing recently announced tariffs on general aviation aircraft as a step backwards, he said, “This will reduce the competitiveness of all those who could benefit from a robust civil aviation industry, such as Indian component manufacturers, Indian rural air services and Indian regional package delivery, for example.”