I want to thank you, Chairman Nunes, for holding this hearing on India. I think it is an important hearing to start off the subcommittee’s work in this Congress. In a political climate that is often extremely partisan, it is important to highlight where there are areas of bipartisan consensus. On the question of India and our trading relationship with that country, I think there is much agreement.
We agree that India is a vital ally in Asia and one with whom we have an important and rapidly growing trading relationship.
• In 2011, our total goods trade with India was nearly $50 billion dollars, up from just $8 billion in 2000. This was more than five-fold growth, notwithstanding the global economic turndown.
• Total services trade, too, has been growing rapidly - from $4.5 billion in 2000 to $28.5 billion in 2011.
• And our investment in India, and India’s investment in the United States have been significantly expanding.
Some may say that this strong and expanding relationship is only natural given the affinities of our two countries, the world’s two largest democracies. But the fact is that, like any good relationship, this one requires work on both sides - work to eliminate unfair trade barriers and establish an even playing field for all of our workers and businesses.
This brings me to the other point on which I think there is also broad consensus across the aisle - that some of the trade policies that India has been pursuing recently are deeply troubling. These policies keep our products and services out of the Indian market and create unfair incentives to spur innovation and production locally in a manner that violates international trade rules. For example, India has a National Solar Mission that requires purchase of local solar products and conditions receipt of subsidies on use of Indian content. India has similar programs in telecommunications and other sectors as well.
Many of these policies stem from concerns and objectives that are entirely understandable - a desire to create jobs for a large young population, a desire to create new green energy sources, a desire to protect national telecommunications networks from security threats. We share many of these goals. But the means that India is using to achieve those ends harm American companies and workers, violate the rules of international trade, and must end.
We have between our two countries, important forums for dialogue, like the Trade Policy Forum and the Strategic Dialogue. And my sincere hope is that we will able to use those forums to find a way forward that is mutually acceptable and consistent with India’s international obligations. But if we cannot, we must be ready to address these issues in other ways - for example, by challenging India’s policies at the World Trade Organization.
In this regard, I note that the Obama Administration has already brought cases challenging exclusionary Indian policies involving American poultry exports as well as discriminatory elements of India’s National Solar Mission. I commend the Administration for taking this active enforcement role. And I’d note that we are seeing here, the contributions of the President’s initiatives - like the Interagency Trade Enforcement Center (ITEC) - in protecting the interests of American businesses and workers. I hope that my colleagues across the aisle will work together with us to continue to support USTR and ITEC in these efforts.
These enforcement actions serve a goal that we all support - compliance with the rules that every WTO Member has agreed to respect. This is important not only for American stakeholders, but it is in the interests of India. A rules-based trading system has helped India confront significant challenges and present itself as a beacon of economic promise. The continued integrity of the trading system is critical for India to be able to address the challenges that remain.
And these challenges are great - India has one-third of the world’s poor, with nearly 70% of people living on less than $2 a day. These are not conditions that can be allowed to persist. We must work together to address them, including through such development programs as the Generalized System of Preferences (GSP). What we cannot afford to do is accept India’s discriminatory policies that, ultimately, will hurt everyone.
