New York: India is willing to offer a “significant” opening of its markets to more US service industry firms if Washington provides more temporary visas for its workers as part of the Doha Round of world trade talks.
Union commerce and industry minister Kamal Nath, in New York to promote his new book and meet US trade representative Susan Schwab, said late on Wednesday he believes there is still a window of opportunity to reach a trade agreement.
Agriculture and manufacturing have dominated the World Trade Organization (WTO) talks, known as the Doha Rround. These talks were launched in 2001 to boost the world economy and help developing countries export more.
Talking business: A file photo of commerce minister Kamal Nath and US trade representative Susan Schwab. Nath, who is in the US, will be meeting Schwab on ways to take the Doha Round of talks forward. (Photo: Fabrice Coffrini/AFP)
In the process, negotiations regarding the services sector have taken a back seat, with one of the most difficult issues for the US being India’s demand for more temporary entry visas for its service industry professionals.
The movement of people across borders is one way—known in WTO parlance as “Mode IV”—of trading in services.
The US provides temporary entry visas for many business professionals, but India sees that as a growth market and wants it to allocate more. Many members of the US Congress view visas as an immigration issue that should not be in trade pacts. That has made it hard for the Bush administration to offer much on that.
“If the US comes to the table with a good Mode IV offer, we’ll offer significant offerings in our services sector,” said Nath, who is meeting Schwab on Thursday in New York. Many countries fear the round will slip into a deep freeze if a final agreement is not signed by the time the next US president takes office.
The US, as the world’s largest exporter of services such as banking, express delivery, telecommunications and distribution, has a huge stake in the outcome of the negotiations.
“If that is the wish list, we will make significant movement on that provided the US moves on Mode IV,” Nath said.
“And we made it clear we are looking at Mode IV issues and not at immigration issues,” he added. “We want a good US offer on that and we would be willing to reciprocate.”
India’s WTO ambassador, Ujal Singh Bhatia, who sat in on the interview, said recent talks in Geneva with the US on the services sector were not positive. “We need some reciprocity and even today the US was not able to indicate any positive movement on Mode IV,” he said.
One US business leader who represents service sector industries said on Tuesday that he has been frustrated by India’s negotiating position. “India is one of the two key countries that haven’t really participated (in the services negotiations). China and India are perhaps the two most important countries from whom we need offers on services,” said Bob Vastine, president, the Coalition of Service Industries.
Addressing agriculture subsidies remains the key to negotiating a successful conclusion to the Doha Round, Nath said.
He reiterated the stance taken by many developing nations that farm subsidies in the US and the European Union must be cut to protect domestic agricultural production.
In India’s case, he said many of the 650 million Indians who are in agriculture are subsistence farmers “who cannot be subjected to the vagaries of subsidized imports.”
India has imported wheat in the last two years and imports of edible oils have risen to help meet rising consumer demand and changing food habits.
Negotiators in Geneva have been working towards a possible ministerial meeting in late May, though there are signs that could slip to June or July.
Bhatia said it would take at least “a few days more” before long-awaited new texts in the agriculture and manufacturing negotiations are released in Geneva.
From that point it would be at least two weeks before ministers could meet to make the hard final decisions on formulas for tariffs and subsidy cuts, Nath said. Separately, Nath said the economic growth of just below 9% expected in the 2008-09 fiscal year has led to strong demand for non-agriculture commodities requiring a ban on certain types of steel and cement.
“We banned (cement) about three weeks ago... I expect that to be at least for the next six months,” he said.