August 31, 2004


India's US trade gamble (Arun Bhattacharjee, 8/31/04, Asia Times)

Following a series of unpublicized negotiations with the US Department of Commerce, the Treasury Department, Department of State and the Pentagon, India feels the time has come for a comprehensive bilateral treaty with the US in the service sector.

This development comes as Delhi announced its new long-term foreign trade policy late on Tuesday. This will replace the country's half a century old exports-imports policy, which has a tenure of only one year and deals with excise and taxes without any long-term trade strategy. The new policy contains far-reaching measures for large employment-generating export sectors like agriculture, textiles and handicrafts, all part of efforts to capture 2% of global trade by pushing up annual exports to US$300 billion by 2009. At present, India contributes a mere 0.8% to global trade.

Aimed at achieving over 16% annual trade growth on the back of 25% growth in the first quarter, the policy contains a slew of measures to boost India's special economic zones, 27 of which have already been approved for operation.

Given India's lofty goals, it makes strategic sense for New Delhi to sign a comprehensive bilateral trade agreement with the US, regarded as the most preferred trading destination for Indian industry and outsourcing companies by the Confederation of Indian Industry (CII). At stake is $1.5 billion in outsourcing business and $5 billion in textiles and other trading, beyond January next.

That is not all.

If nothing else, Mr. Kerry's apparent belief that France is a more important ally than India and his opposition to free trade should disqualify him from the presidency in the 21st Century.

Posted by Orrin Judd at August 31, 2004 6:46 PM

Give me India, Israel, Britain and Australia and y'all can pretty much have the rest of the world. Maybe Iraq in the future.

Posted by: Rick T. at August 31, 2004 7:18 PM

This will be good ammunition against the neo-protectionists on the outsourcing issue. It will link, in an obvious way, the benefits to U.S. workers of trade in services. Ordinarily, the costs to specific workers and sectors are obvious, but the benefits are dispersed. Great issue, and one this administration has worked on for several years.

Posted by: Dave Sheridan at September 1, 2004 4:39 AM

Making a trade deal with a country where two out of three people have gross incomes of under $2 a day is what I call bettin' on the come.

Woolworth's went out of business

Posted by: Harry Eagar at September 1, 2004 10:31 PM