Get friendly, Mr Zoellick

It is a pity that even though Robert Zoellick, the trade representative of the United States, has a funny moustache he seems to lack a sense of humour. At least his New Delhi audiences have never had the opportunity of seeing Zoellick relaxed and willing to concede an argument or two. Zoellick8217;s impatience with Indian hectoring on trade liberalisation is understandable. He thinks we are being hypocritical on the business process outsourcing BPO issue. If India will not open its markets more to imports, why should the US do so, he wants to know. This is age old Republican Party 8220;reciprocitarianism8221; that trade guru Jagdish Bhagwati rubbished long ago because it goes against the grain of the very liberal trade theory that Zoellick so favours.

The problem is that the World Trade Organisation is built on the logic of tit-for-tat trade diplomacy based on the principle of you giving something in exchange for what you wish to take. But that is why India wants the issue of the cross-border movement of people taken up in all seriousness at the World Trade Organisation WTO. Zoellick8217;s carping about India not being a signatory to the plurilateral agreement on government procurement is not all that relevant since India has shown its willingness to get on board this agreement in the WTO. The issue is simple: What8217;s in it for India? A little give on outsourcing, can go a long way on the take the US wants on trade in goods and services.

In all its complaints about the trade deficit vis-a-vis India, the US must realise that India has increased its share of world imports in recent years and it is importing more from a wider range of countries. The recent appreciation of the rupee can only further help increase demand for imports. If US exports to India are not rising, it is not because India is any more protectionist towards the US but because the US could be losing its competitive edge. Moreover, there are still controls in place that disable hi-tech exports to India from the US. So rather than fret, fume and complain, US policy makers must sit down with their Indian counterparts and understand what is staying the government8217;s hand. If the world8217;s most powerful country turns to trade protectionism to protect jobs, what is a developing economy like India 8212; with millions in structural unemployment and poverty 8212; to do? Clearly, a bilateral dialogue on trade policy within a wider framework of the bilateral strategic relationship is called for. The US can easily be a partner in India8217;s progress rather than be portrayed as a hurdle. If Zoellick tones down his rhetoric and spares some time to listen, he may come across as a more friendly interlocutor.