India to oppose protectionism at G – 20 meeting
The Economic Times, March 19, 2009, Page 10
Nirmala Ganapathy NEW DELHI
INDIA will take a tough position against protectionism at the G-20 summit and also put out the message that tightening of markets and restrictions on services could be met with reciprocal responses from India.
With Indian firms investing in many countries and creating jobs locally, India feels that it has enough leverage to negotiate against protectionism. It is also going to play on the point that economic growth of countries like India and China is an important part of international economic recovery.
`We need to break it down and work with them to use leverage. Indian firms are creating jobs and investing in these countries. Today you have enough to negotiate. It’s a new position,’’ sources said. This is an issue that Prime Minister Manmohan Singh is expected to take up during the G-20 summit, which starts on April 2.
But there is a realisation that it is going to be an uphill task to convince other countries that protectionism in services and finances need to be avoided. Though countries have largely denounced protectionism, there is a trend of countries quietly putting in place protectionist measures particularly in services and finances. India views attempts to cap the H1B visa programme by the US as type of ``trade distortions’’ and hopes that US President Barack Obama takes the lead in stopping this slide towards protectionist measures.
It is understood that India will work at both the multilateral and bilateral level to stop protectionist measures from hurting Indian interests. For a start, India has already raised the issue of protectionist measures seeping in through the latest stimulus package with the US government also with Congress members. Apart from a Buy America clause, the stimulus package also includes a provision to discourage banks which receive bailout money from hiring workers from the H1B visa programme.
`Clearly protectionism is not the way,’’ sources said. New Delhi also believes that just saying everything should be WTO compliant is also not a solution as visas and services are not covered by WTO.
Apart from fighting protectionism, India is also seeking a place on the Financial Stability Forum (FSF), an international body of government and bank officials from 12 countries and a number of financial institutions. The body, which is supposed to look at market stability is expected to be expanded and India along with China are strong contenders. For India, membership in FSF would be another step towards getting a greater say in international, financial matters. This is expected to be discussed and possibly decided at the G-20 summit.
But there are also fears that the G-20 summit could disintegrate into a talk shop if countries stick to their respective positions. India is expected to urge balance on all the key issues that are under discussion including increasing funds for the IMF and steps towards financial structuring. Sources said that ``considerable progress’’ has been made during preparatory meetings. Planning Commission deputy chairman Montek Singh Ahluwalia had led the delegation to the G-20 sherpas meet on March 11.
The Economic Times, March 19, 2009, Page 10
Nirmala Ganapathy NEW DELHI
INDIA will take a tough position against protectionism at the G-20 summit and also put out the message that tightening of markets and restrictions on services could be met with reciprocal responses from India.
With Indian firms investing in many countries and creating jobs locally, India feels that it has enough leverage to negotiate against protectionism. It is also going to play on the point that economic growth of countries like India and China is an important part of international economic recovery.
`We need to break it down and work with them to use leverage. Indian firms are creating jobs and investing in these countries. Today you have enough to negotiate. It’s a new position,’’ sources said. This is an issue that Prime Minister Manmohan Singh is expected to take up during the G-20 summit, which starts on April 2.
But there is a realisation that it is going to be an uphill task to convince other countries that protectionism in services and finances need to be avoided. Though countries have largely denounced protectionism, there is a trend of countries quietly putting in place protectionist measures particularly in services and finances. India views attempts to cap the H1B visa programme by the US as type of ``trade distortions’’ and hopes that US President Barack Obama takes the lead in stopping this slide towards protectionist measures.
It is understood that India will work at both the multilateral and bilateral level to stop protectionist measures from hurting Indian interests. For a start, India has already raised the issue of protectionist measures seeping in through the latest stimulus package with the US government also with Congress members. Apart from a Buy America clause, the stimulus package also includes a provision to discourage banks which receive bailout money from hiring workers from the H1B visa programme.
`Clearly protectionism is not the way,’’ sources said. New Delhi also believes that just saying everything should be WTO compliant is also not a solution as visas and services are not covered by WTO.
Apart from fighting protectionism, India is also seeking a place on the Financial Stability Forum (FSF), an international body of government and bank officials from 12 countries and a number of financial institutions. The body, which is supposed to look at market stability is expected to be expanded and India along with China are strong contenders. For India, membership in FSF would be another step towards getting a greater say in international, financial matters. This is expected to be discussed and possibly decided at the G-20 summit.
But there are also fears that the G-20 summit could disintegrate into a talk shop if countries stick to their respective positions. India is expected to urge balance on all the key issues that are under discussion including increasing funds for the IMF and steps towards financial structuring. Sources said that ``considerable progress’’ has been made during preparatory meetings. Planning Commission deputy chairman Montek Singh Ahluwalia had led the delegation to the G-20 sherpas meet on March 11.
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