US And India Issue Joint Statement On Trade

by Glen Shapiro, LawAndTax-News.com, New York

07 March 2006

US President George W. Bush and Indian Prime Minister Manmohan Singh jointly issued a statement on trade on Thursday, during the President’s visit to India.

The joint statement reaffirmed the increasingly close cooperation between the United States and India on international trade in both multilateral and bilateral fora, stating that:

"Whereas the United States and India once could find little common ground in multilateral trade negotiations, we are now working together in pursuit of a successful and ambitious global trade liberalizing agreement."

President Bush and Prime Minister Singh reaffirmed their shared commitment to completing the WTO Doha Development Agenda (DDA) before the end of 2006, and agreed to work in partnership to help achieve this outcome.

Recognizing the most immediate task to be reaching a breakthrough in the negotiations, the leaders agreed on the need for a substantial outcome in all three pillars of the agriculture negotiations (domestic support, export competition and market access), and significant improvements in market opportunities in manufacturing and services, including transparency of regulatory practices in services.

The two leaders also reaffirmed their commitment to strengthen and deepen bilateral trade ties between the two countries, announcing that:

"The US-India trade relationship has grown substantially over the past five years – with total two-way trade in goods increasing from $14 billion to over $26 billion. However, potential trade and investment flows between our two dynamic, growing economies could be far greater."

Under the Trade Policy Forum (a standing bilateral committee created in July 2005, and chaired by Indian Commerce Secretary Kamal Nath and US Trade Representative Rob Portman, to increase trade and investment flows), India has acted to ensure that insecticides produced by a US company can be sold throughout India, while the United States has addressed a long-standing Indian concern through the repeal of the Byrd Amendment.

India has also committed to eliminate special duties on carbonated beverages, to reduce duties on life-saving drugs, and in general to lower duties on most non-agricultural imports.

Going forward, both sides have agreed to consult with respect to potential initiatives to enhance the transparency of tariff regimes, government procurement issues (including India’s procurement preference policies and a pending cellular telecommunications tender); Indian regulatory requirements, subsidies, and/or tariffs affecting for US exports of boric acid, fertilizer, large motorcycles, and refurbished computer parts; the continuation of US trade preferences; and US rules governing gems/jewelry exports, and bonding requirements for antidumping duty orders.

Also under the auspices of the TPF, it emerged that the United States and India have addressed concerns regarding market access and recognition for accountants, new Indian conditions for international telecom licenses, and new Indian media and broadcasting-related policies by facilitating a dialogue between the relevant boards, authorities, or companies of both countries.

The two governments revealed that they have also agreed to exchange information on mutual recognition for various professional services, continue discussions on equity limitations in various service sectors, explore market access issues in the area of legal services, and to continue discussions on Indian regulations in the telecom and broadcasting/media sectors, the movement of persons, and market access for financial services in the US.

Since the creation of the TPF, it emerged, India has liberalized its restrictions governing foreign direct investment in the retail sector (allowing 51% FDI in retail trade for single brand products), and removed an approval requirement for 100% FDI in wholesale stores.

Going forward, the two governments have agreed to continue under the TPF a dialogue on investment restrictions, especially in the retail, financial services, and insurance sectors, and to seek to identify potential sector-specific investment joint initiatives (e.g., transportation, agroprocessing).

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