U.S to work towards lowering trade barriers

By Sridhar Krishnaswami

WASHINGTON, MARCH 31. The Bush administration has taken a swipe at Asia and Europe in its Annual Review of Trade and Trading Barriers, with Japan coming in for the largest amount of criticism if the devotion of 58 pages to it out of 471 pages in the report is anything to go by.

Overall, America's trade deficit jumped nearly 40 per cent in 2000 to a record $369 billion. For the first time, China has surpassed Japan for the largest trade gap with the United States. The U.S. deficit with China rose by 22 per cent to a record $83 billion.The deficit with Japan rose by nearly 11 per cent to $81 billion;and the deficit with the European Union jumped nearly 30 per cent to $56 billion.

Even though the Bush administration has given little indication as to the countries that will be targeted for trade cases, the general warning has been that the Trade Report for 2001 will be some sort of a guide for priorities in dismantling barriers. ``We need to build support for open trade.That means publicising the existence of trade barriers in foreign markets and working with our trading partners to eliminate them,'' the U.S. Trade Representative, Mr. Robert Zoellick, said in a statement.

``The erosion of a consensus on free trade is dangerous. The Bush administration will work hand-in-hand with Congress to negotiate lower barriers to trade around the world while further liberalising our market at home,'' Mr. Zoellick remarked.

India too has come in for some extensive discussion with the Bush administration making the point that while progress has been made in tariff reductions and this has helped U.S. producers, further reduction of basic tariff rates and elimination of additional duties that existed in 2000 would benefit a wide range of American exports.

In terms of the surplus-deficit picture between India and the United States in the realm of trade, it is being pointed out that in 2000, American trade deficit with India was $7 billion - an increase of $1.6 billion from 1999. Exports from the United States totalled $3.7 billion - a decrease of $45 million over 1999, while imports from India totalled $10.7 billion, or a 17 per cent increase in 2000 over the 1999 figures. India was the United States' 31st largest export market in 2000.

The report lists a number of areas that the United States sees benefit to itself from further tariff reduction. These would include agricultural chemicals, fertilisers, wood, jewellery, precious metal, computers, office machinery and spares, medical equipment components, distilled spirits and carbonated drinks.

It lists the changes that have been announced in the 2001-2002 budget on a range of products, besides explaining the kind of commitments that India undertook in the Uruguay Round. One of the things that the USTR focuses on is the textile sector. ``India maintains a significant number of import prohibitions in the textile sector... and India remains one of the most heavily protected markets in the world from the standpoint of potential U.S. textile exporters,'' the report says.

In the realm of Intellectual Property Rights, the USTR argues that India's patent protection is ``weak and has adverse effects on U.S. pharmaceuticals and chemical firms'' with many U.S. invented drugs widely reproduced in India since product patent protection is not available. The same goes for agrochemical industries which have withheld marketing and production of produce compounds in India. ``U.S.industry estimates that export sales losses...range from $5-25 million.''

On the subject of Telecommunications, the Bush administration has taken the position that while there had been some positive steps towards liberalising the telecommunications market, concerns remain on inter-connection charges that new entrants have to pay, alleged irregularities in the tendering process, ``and continued bias of telecommunications policy towards government-owned service providers.

In taking note of the changes in the area of investment, the USTR said that industries have expressed concern over the Government of India's stringent and non-transparent regulations and procedures governing local shareholding. ``Current price control regulations have undermined incentives to increase equity holdings in India. Some companies report forced re-negotiation of contracts in the power sector to accommodate government changes at the state and central levels,'' it said.

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