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Summary of Discussions of July 20, 2009 Meeting of the Advisory Committee on International Economic Policy

Bureau of Economic, Energy and Business Affairs
July 20, 2009


The meeting was open to the public but conducted under Chatham House rules.  Only cited participants’ statements are for attribution.  The meeting drew almost 60 attendees from the membership, general public and media.

Committee Chairman Theodore (Ted) Kassinger of O’Melveny & Myers, LLP, opened the meeting of the Advisory Committee on International Economic Policy (ACIEP) and welcomed the members and participants.  Chairman Kassinger called for Chatham House Rules and introduced David Nelson, Acting Assistant Secretary of State, Bureau of Economic, Energy and Business Affairs. The topic of discussion for the meeting was “U.S.-India Relations” with a focus on economic engagement.

Acting Assistant Secretary Nelson welcomed the new members and expressed his appreciation for their willingness to serve and provide their insight to the State Department.   Nelson informed the members of the Department’s view of India as a foreign policy priority and the Secretary of State’s commitment to the region.  Nelson introduced Acting Deputy Assistant Secretary for South and Central Asia Michael Owen who reaffirmed Nelson’s comments about India by pointing to the recent elections, Under Secretary of State Bill Burns’ recent trip, the confirmation of U.S. Ambassador to India Tim Roemer and the Secretary of State’s visit to the region.  During her visit, the Secretary announced progress in many of the pillars of the U.S.-India Dialogue with the help of the private sector.  Michael Owen discussed the five pillars of the U.S.-India Dialogue which includes global issues and security, energy and climate change, education and development, economics, trade and agriculture and technology innovation.  Owen also announced PM Singh’s visit to Washington in late November.

ACIEP member respondents were asked to comment on U.S.-India relations based on their activities and experience.  Members gave their insights on areas including the Doha Round; working to get India to recognize its long-term stake in global trade; private-sector exchanges that have driven the U.S.-India relationship; and ways the U.S. government can help the private sector capitalize on opportunities.  The private sector is looking for assistance in defense trade, rural development and infrastructure, and ways to encourage U.S. companies’ opportunities in the information and communication technologies sectors.  There was emphasis on the importance of establishing a viable business model in India.  Members raised concerns about the corruption in India even as India is placing increased emphasis on corporate social responsibility.  Improvements to the licensing process were mentioned.  Members opined that intellectual property rights and data protection provisions either do not exist or are not enforced.  Further, members commented that the U.S. companies do not have the same access to some sectors of the Indian markets as Indian companies do the U.S. market.  The U.S. is India’s number one trading partner, but India is the U.S.’s seventeenth largest.

Members see opportunities for cooperation especially in the education and information technology sectors.  The IT market is projected to grow by 54 percent between 2008-2011.  India has a skilled work force and has stated its commitment to have a level playing field, but needs to reduce its barriers to trade and imports.  The Indian offset policy in the defense sector is a concern for members, but is still viewed as a way for cooperation between the United States and India.  India does not belong to the environmental goods and services trade agreement which would allow India to play a larger leadership role in the global economy.  India’s participation in this agreement would allow for necessary improvements to its infrastructure and a reduction in bureaucratic hurdles.  India has committed to close collaboration with other countries on climate change issues at the United Nations Framework Convention on Climate Change (UNFCCC) scheduled for December 2009.

Subcommittee Updates
Dr. John Sullivan, Ph.D., Executive Director of the Center for International Private Enterprise (CIPE) and member of the Subcommittee on Economic Empowerment in Strategic Regions (EESR) gave an update on the Subcommittee’s most recent work.  EESR activities are slow now due to business school summer break but proposal review will resume in the fall when business schools are back in session.  Participating schools include George Washington University, University of Notre Dame, Cornell University, American University and the Thunderbird School of Global Management in Arizona.  Dr. Sullivan also introduced Nathaniel Turner of the Department of State as the point of contact regarding EESR’s activities.  Potential investor leads have been forwarded to the entrepreneur for the medical lab project in Iraq.  EESR is designed to promote sustainable job creation in regions where poverty and isolation have left their populations vulnerable to exploitation by extremists.  Some of these proposals are on the State Department website; information is also on the website of the U.S. Chamber of Commerce.

William Reinsch, President of the National Foreign Trade Council and Chair of the Economic Sanctions Subcommittee, presented on behalf of the Sanctions Subcommittee a letter for ACIEP consideration and approval. The letter would express the Committee's concerns to the Secretary of State regarding lack of clarity in implementation of the Trade Sanctions Reform and Export Enhancement Act (TSRA). The Committee voted to approve the letter, which will be sent to the Secretary of State.

Alan Larson, Sr. International Policy Advisor, Covington & Burling LLP, and Thea Lee, Policy Director, AFL-CIO, co-chairs of the Subcommittee on Investment, reported on their activities since the last meeting when the Subcommittee was established.  The purpose of the Investment Subcommittee is to review the model Bilateral Investment Treaty (BIT). Subcommittee meetings have included background presentations by USG officials.  There is a high-level of interest in this Subcommittee.  The Investment Subcommittee plans to give a full report to the ACIEP in September.

Chairman Ted Kassinger closed the meeting by thanking the meeting participants for a lively discussion on U.S.-India relations.  Suggestions of topics for the next meeting were submitted. 

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