US seeks India`s constructive engagement on WTO

Washington: India and the United States have asked each other to be mindful of the interests of poor countries in global trade, with the US seeking "flexibility" from developing nations and India`s "constructive engagement" for the success of the stalled WTO talks.

Maintaining that India would "benefit greatly" by opening up its market and becoming a "leading voice" in the developing world by offering "real reforms," Carlos Gutierez, US commerce secretary, said even on the bilateral trade front, India should respond to the openness provided by the US.

Gutierez said that the US was "willing to make difficult choices" on the WTO talks, but added that all member countries had a "shared responsibility to make the round a success."

He told the large developing nations (a euphemism for Brazil and India) to "step up" efforts to move the Doha round forward and said the recent G-4 meetings in Potsdam had failed because "some WTO members refused to show flexibility or even a "minimal amount" of additional market access".

It was in India`s national interest to be a leading voice in the developing world, said Gutierez, "a voice that steps up and offers real reform and real progress at the Doha development round…. Bilaterally, we encourage India to lead by responding to the openness we have provided for Indians who participate in our market, a presence which has benefited both economies."

Gutierez also said that significant restrictions remained on American investment in India which were not present for Indians who wished to invest in the United States. He identified greater foreign participation in pensions, insurance, banking, and multi-brand retail would bring greater efficiencies, better prices, new products, and more choices for Indian consumers.

"Without providing adequate protections to innovative pharmaceutical producers, companies that have spent heavily on research and development will hesitate when considering innovation-driven investments in India," he said.

"They seek and deserve a strong regime for protection of pharmaceutical test data. Without such assurances, Indian consumers will continue to be denied access to products based on those innovations" he added.

The US commerce secretary also said that while the US applauded India for unilaterally reducing tariffs on many imports, there are categories of products where "more can be done", identifying the duty structure on distilled spirits and wines, large motorcycles and the recently announced tariffs on general aviation aircraft.

Gutierez also said the restrictions on import of American wheat was as to Indian consumers. "The only major country American wheat farmers can''t export to is India, where restrictions on wheat imports effectively prevent American farmers from bidding on contracts to India," he said.

At the first meeting between union commerce minister Kamal Nath and the US trade representative Susan Schwab, after the breakdown of negotiations on reviving WTO between Indian, US, European Union and Brazilian officials in Potsdam, Nath said, "There has to be a convergence of respecting each other''s sensitivities. And I want to assure you from here, that Susan (Schwab) and I will find that convergence."

Schwab, who met Nath privately earlier in the day, 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.

Changes in the global economy have deservedly given advanced developing countries like Brazil, India and China an enhanced role in world trade talks, Schwab said adding that with that privilege comes responsibility, "including responsibility to maintain the global system, even when it involves some sacrifices," she said.

The United States and other developed countries have an obligation to open their markets the most in any WTO trade deal, "but some of the market opening burden needs to borne by other players, by the emerging players" like Brazil, India and China, Schwab said.

Although Nath expressed confidence the United States and India could bridge their differences, he repeated his long-standing concern that significant market openings could hurt India''s 600 million subsistence farmers.

Nath also said that India also had to look out for other developing countries, which could be hurt by a bad deal.

"When we talk of the Doha round ... it''s important that the economies of the developing countries become healthy and remain" healthy, he said otherwise, they won''t be able to afford to buy foreign goods, even if they open their markets, Nath said.