U.S. Commerce Department to India: “Doha not a donor’s conference”

U.S. Commerce Department to India: “Doha not a donor’s conference”

U.S. Commerce Department to India: “Doha not a donor’s conference”

A U.S. Commerce Department official said that India must make strides to open its economy and stop export quotas if it is to become a full-fledged economic powerhouse.
   In a speech Monday about India-U.S. trade relations, Christopher A. Padilla, under secretary of commerce for international trade, also said that India has a responsibility to help solve global food supply and energy issues and said the country’s hard-line stance in Doha negotiations threatens to undermine the whole process.
   “India has grown because India has opened its economy,” Padilla said. “The United States hopes that India will continue to liberalize and integrate with the global economy. To fully realize its economic potential, we hope India will make more progress in areas such as caps on foreign equity in retail, insurance, and financial services. We would like to see more protection for intellectual property, particularly in the life sciences, where India seeks to attract more investment.”
   Padilla said an investment treaty between the two nations would be beneficial to both.
   “We hope India will propel the bilateral relationship forward by working with us on a high-standard bilateral investment treaty,” he said. “A BIT would complement India's economic reforms and create a more welcoming climate for foreign investment.”
   U.S.-India trade ties have grown markedly this decade as tensions over political issues receded.
   “These close ties became more formalized after 2001 when our two governments abandoned decades of Cold War mistrust and set out to create a truly strategic partnership for the 21st century, he said. “Since then, we have reenergized the bilateral relationship at all levels. Overall bilateral trade now stands at close to $42 billion and U.S. exports to India increased nearly 75 percent last year. We continue to collaborate closely on a range of issues, from agriculture to space research to energy security to missile defense. Through the Next Steps in Strategic Partnership and the U.S.-India High Technology Cooperation Group we strengthened nonproliferation cooperation and laid the foundation for an explosion in high-technology trade and collaboration.”
   But he said India, as a growing power, must shoulder some of the burden of energy and food issues troubling the global economy.
   “India is now a global player and the time has come for India to bear a greater share of responsibility in addressing global economic challenges,” he said. “From energy security, to food shortages, to climate change, to global trade talks, India should be a constructive and proactive partner. And India will find a supportive and engaging ally in the United States.
   “As two of the world's largest producers of agricultural goods, the United States and India can also help lead global efforts to address rising food prices. This means cooperating to get food aid to those who most need it. This means working together to ensure that the market is able to react and adapt to fluctuating food production. And this means refraining from the use of export quotas, which will only exacerbate food shortages and inflate prices. Export quotas don't work. In fact, they make things worse.”
   Padilla spelled out just how significant India’s agricultural sector is, and how controlling export of key products affects the global market.
   “India is the second-largest rice producer in the world, the third-largest wheat producer, and the seventh-largest corn producer,” he said. “But the Indian government's decision to impose certain export bans on non-basmati rice and edible oils has rattled international markets. While export bans are designed to increase short-term food security, these policies make the situation worse. They take food off the global market, drive prices higher, and discourage farmers from responding to market forces and investing in future production. We can only adequately address this crisis if we work together to increase the supply of food and discourage continued use of export controls that will harm India's neighbors and drive up world food prices.”
   Lastly, Padilla touched on Doha negotiations, and chastised the Indian government for shirking economic ideals that it expects of developed nations.
   “India is proof of the remarkable effects that opening up an economy can have on a country's citizens,” he said. “So it is disappointing that India has been a roadblock to success in the Doha negotiations. India continues to insist that it and other developing countries be protected from any real market opening in industrial goods or agriculture or services, while it asks developed countries to do ever more.
   “The Doha Round negotiations are not a donor's conference — they require major economic powers like India to step up and take responsible leadership, rather than working behind the scenes for Doha's demise. We are not asking that India and others open their markets to the same extent as developed countries — far from it. Yet so far India has resisted virtually all liberalizing proposals in Doha, even those proffered by other developing countries. The latest Indian proposal for a tariff-cutting formula coefficient of 30 for developing countries and five for industrial nations is a complete non-starter. The time is fast approaching when India's stance on Doha may result in the failure of the Doha Round.” ' Eric Johnson