U.S. may dilute stand on labour at WTO

By Our Special Correspondent

NEW DELHI, FEB. 21. The U.S. is likely to agree to the launch of a limited round of trade negotiations in contrast to their earlier stance of a seeking a comprehensive new round. In addition, the Bush administration is expected to de-emphasise the focus on linking trade with labour and environmental standards.

This was disclosed by the visiting Fellow of Brooking Institution and former general counsel of the U.S. Department of Treasury, Mr. Neal Wolin, here today.

He told reporters that the aim of the Bush administration, at the next ministerial conference of the World Trade organisation to be held at Qatar, would be to include agriculture and services negotiations in the new round as well as seek discussion on the WTO dispute settlement mechanism.

It would ``substantially de-emphasise'' the trade and environmental issues that had derailed the Seattle conference. He explained this is primarily because the Republican party does not depend on labour or environmental groups for support as these are primarily pro-Democratic organisations. There is thus much less need for a Republican administration to give much prominence to these issues unlike the Clinton administration. To that extent, Mr. Wolin felt, several irritants in Indo-U.S. relations would be removed by the new administration.

On the slow pace of foreign investment flows to India, he said there is great potential for capital from the U.S. and other countries to flood India. But this would not take place till there is a substantial improvement in infrastructure, a less encumbered capital market is developed, subsidy of domestic industry is reduced and regulatory difficulties are ironed out.

He noted that economic reforms and liberalisation are in the right direction. ``The only question is of pace,'' he said. At the same time, he maintained the prospects are good for much higher flows of direct foreign investment as occurred in southeast Asia 20 years ago.

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