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US to pressure India on trade front
By siliconindia
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Thursday, 11 March 2004, 20:30 IST
WASHINGTON: Faced with a domestic backlash over outsourcing of jobs, the United States has let it be known that it will step up pressure on India to open up its market to increased exports of American goods and services, reports Hindustan Times.
Washington's contention is that India, seen as the biggest beneficiary of American outsourcing, should return the favour by drastically cutting its barriers to trade and investment.
US Trade Representative Robert Zoellick on Tuesday obliquely indicated that emerging economic powers like India and China could face increased barriers to the US market unless they opened their own markets to American exports.
"The point that I've emphasised to the Indians is that if we're going to remain open for them, it's got to be a two-way street," Zoellick told a hearing of the Senate Finance Committee, where several Democrats went on the offensive over outsourcing.
Concentrating on India and China, he said: "If countries around the world that are emerging economic powers want to get the benefits of the (open market) system, they're going to have to contribute."
Regardless of the series of measures taken by New Delhi in recent times, he maintained that India was still one of the most closed economies of the world.
The US Trade Representative also brushed aside India's criticism of the recent Senate legislation against federal outsourcing. According to him, India has "absolutely no right to complain" because it is not a party to the World Trade Organisation's code to make government procurement deals transparent.
Zoellick, however, took pot shots at the Democrats' line on outsourcing and trade policy. As he put it, the US ought not to retreat into "economic isolationism" just because some manufacturing and service sector jobs are going to China and India. It is, however, entitled to a level playing field to sell its products to the two countries.
The USTR was echoing the comments of President George W. Bush in Virginia, branding Democrats as "economic isolationists" who would raise new trade barriers and damage the US economy. America must remain strong and confident about its ability to trade in the world, he said.
But the Democrats were unrelenting. At the Senate hearing, Senator Max Baucus said the Bush administration's actions have not matched its rhetoric. Turning to India, Baucus commented that India was benefiting enormously from American outsourcing, the US itself "is not getting anything in return, because India has such a closed market".