- The Washington Times - Friday, March 17, 2000

The United States is trying to put Indian-American trade relations on a better footing through President Clinton's visit to the world's most populous democracy.

Because both the United States and India have flourishing information-technology sectors, the potential for cooperation is there, say officials from both countries.

But nascent efforts toward partnership are still overshadowed by the massive differences the two countries have on issues like the linkage between labor standards and international trade.

"The Indians are at the forefront of technology related to electronic commerce, so there's a very natural fit between India and the United States on these [technology] issues," U.S. Trade Representative Charlene Barshefsky said yesterday.

Mr. Clinton arrives in New Delhi Sunday for a five-day visit that will take him to some of the high-tech centers that have made India one of the leading software exporters.

Though much of the trip will focus on security issues, Mr. Clinton also will preside over the start of a bilateral "Knowledge Trade Initiative" that is designed to develop closer ties between the two countries on information-technology-related issues.

Both countries hope that this start could give a boost to cooperation on other trade issues, despite differences that have dominated in the past.

"[T]here are areas where the United States and India can work together," said Naresh Chandra, India's ambassador in Washington.

The KTI would be a "big step forward" under the current circumstances, said Jayashre Watal, a former Indian government trade official.

While the United States is still the world's undisputed leader in this vital sector of the new economy, India has, over the past 10 years, turned in a stunning performance by any standard, let alone the standards prevalent in the developing world.

India's Hyderabad and Bangalore regions are two of the most vibrant centers for software development in the world, and Indian immigrants have helped found between 30 percent and 50 percent of the Silicon Valley startups in recent years, according to former U.S. Ambassador to India Frank Wisner.

Trade between India and the United States has nearly doubled since 1992 to $12.7 billion last year, and American firms accounted for 25 percent of direct investment in India during those years.

These developments helped fuel an unusual alliance during negotiations in the World Trade Organization over the past few years, as India backed a U.S.-led push to impose a moratorium on tariffs on international electronic transactions, Mrs. Barshefsky points out.

But this partnership on high-tech policy never spilled over into other areas. In particular, India has remained the most vocal opponent of American efforts to have the WTO deal with labor and environmental standards.

And even if China joins the WTO, India will remain a chief spokesman of the developing world, trade experts note.

"The Indians are right at the center of shaping the international consensus, and there is a great deal of overlap between what they're after and what we're after," Mr. Wisner said.

The question of whether the United States and India can forge a closer working relationship on trade could determine whether WTO members succeed in jump-starting negotiations that foundered in Seattle last year, Miss Watal said. But the odds are still long.

"On WTO issues, the United States and India have dug themselves into pretty deep [opposing] trenches," Miss Watal said.

And, Mrs. Barshefsky points out, the United States still has a number of disagreements with India in the bilateral-trade relationship. U.S. producers of soda ash, the main element in glass, are clamoring for a slice of the lucrative Indian market.

And companies as diverse as Eastman Kodak, Proctor & Gamble, the Coca-Cola Co. and Amway have complained about various Indian policies, according to the U.S.-India Business Council.

But, for the moment, these bilateral trade issues are taking a back seat to the fresh effort to use the first visit by an American president in 22 years to find a different tone in Indian-American relations.

"We do not want to get bogged down in trying to solve the problems at hand," Mr. Chandra said.

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