By James Eugene

Hitting another brick wall negotiating a Bilateral Investment Treaty (BIT), the US has recently blamed India for “not being ambitious enough to conclude the trade pact”, according to The Times Of India.

Adewale Adeyemo, Deputy Assistant to the US President, said that the two countries “are far apart on a number of issues with regard to trade and investment”, before adding that he felt their Indian counterparts “have not been ambitious (on concluding BIT) as we want them to be, but we remain open”. Adeyemo did acknowledge India as one of the top countries in the G20 in terms of growth and wishes to play a part in aiding and reaping the rewards of the emerging giant’s fortunes.

The US and India have been negotiating the terms of the BIT since 2008. However, according to business-standard.com, Adeyamo stated that if trade negotiations stall and trade isn’t liberalised further, then investments will move elsewhere.

 

Negotiation Problems

Negotiating trade agreements is not an easy task. One of the main reasons for the slowdown in the speed of negotiations between India and the US is due to the fact that the latter is seeking to implement trade sanctions on the former after winning a dispute – mediated by the World Trade Organisation (WTO) – regarding Indian restrictions on imports of US poultry meat, eggs and live pigs. According to Reuters, a US Trade Representative previously said that “US annual exports of poultry meat to India could excess $300 million once the restrictions are removed”.

Earlier in the year, the US also won another claim to the WTO against India, this time in regards to India’s solar power program which was under scrutiny after imposing domestic content requirements for solar equipment.

A third issue that has caused friction between the two nations occurred when US lawmakers proposed changes to visa programs, in particular H-1B and L1, that allow skilled Indian workers to move to the US. The bill has been introduced to tackle the supposed problem of businesses hiring foreign workers because they are cheaper than domestic workers, as well as companies exploiting foreign workers who have a visa. India are concerned that if the bill is passed by Congress, then it will make it much more difficult for large Indian IT firms to workers who require these visas. Outsourcing companies are top users of both the H-1B and L1 visa programs.

Whether or not negotiations between the two nations will speed up in the near future is difficult to tell, especially given the current disputes between both of them. Trade representatives will be working even more diligently in the next few months in order to come to some sort of agreement.