than that, but i think that@@@ mmitted about the restraint they have made over the last overhears on these points are taken after the mumbai attack. on the other hand i think india has a very good idea of what its own priorities are. i don't want our friends to my right to not have to answer many

questions, so i want to throw one question on the table for them. as was noted earlier it looks like an end-user agreement is likely to be completed sooner than later. i'm just curious whether you think that's going to give rise, particularly in the congress to more debate about the relationship, or will the end-user agreement be something that is a loser relationship there, to have kind of a repeat on a smaller scale about the nuclear deal, that kind of debate? is the end-user agreement likely to be of a model that's going to folks are going to say that fits in with our general view about end-user agreements, or will it be constructed in such a way to be something of an exception? >> of course, a little hard to comment with authority not having seen drafts that are being negotiated.

so it really would depend what the end product looks like, but i expect that it will be a positive that the agreement negotiated will be one that is consistent with the u.s. law. as seen as such by the congress, and a few u.s. administrations have made a big deal about the importance of this issue. they are ensuring cooperation with the congress, which pays a lot of attention to these issues. and i would expect that an agreement reached would be reached in a way that would be acceptable to people in congress who follow this closely. >> the thing i would add, i think it's at the core of continued defense and security cooperation between u.s. and

india. with respect to cooperation at the industry level. where it may get more scrutiny, not near perhaps as much as the nuclear deal did. when it's a direct commercial sale versus a military sale case. after i think there might be a little pause in the action, but again, much like mike colleague indicated, not knowing the actual language and the boundary conditions associated with that, i think we would see on the fms cases a positive outcome and direct commercial sales, perhaps a little more scrutiny. >> we have time for one more question. so, please. >> i know you said no comments, but i can't help, i am compelled to take issue with dan blumenthal's comment about

designing things for export. as a company that lost one and a quarter billion dollars designing something for export that nobody wanted. the only way that our industry is going to make it in this internet, tough international business environment, is selling the stuff that the customers want and they don't want second great stuff ,-com,-com ma which is what the indians are currently getting from the russians. >> declared by my point i don't disagree. i don't disagree with you at all. my point is that we have an fms export system designed for the cold war that has to be upgraded. obviously, because we are moving into an era of war where we want arbors to be strong and have equipment that makes them strong, but i don't take issue with the fact that it has to be what the customer wants. i'm thinking of the f-22, for example, which is just, you

know, which is just a tragedy in a way because we have these, all these restrictions from years past. we can't export an airplane, and i'm not talking about two i-india. i'm talking about two other countries. but my point is, we build things that the customers want but we build things as a national strategy with the idea that we are trying to strengthen the partners, and i take no issue with your particular point. >> we're going to move straight into our next panel, which is on indian u.s. economic cooperati cooperation. before we adjourn i would like you to join me in a hand of applause for our panelists. they did a great job. [applause] thanks, mary. begin.

i want to welcome everyone to our second panel this morning. titled the future of international economic corporation. civil nuclear cooperation, doha, and beyond. thank you to each of our panelists were being here. it seems like we have lost claude. >> the purpose of this panel is to examine u.s.-india economic relations postelection. u.s.-india bilateral trade has grown from 14.3 billion in 2000, two over 43.3 billion in 2008. the countries have stood shoulder to shoulder for the completion of the u.s.-india

civil nuclear deal just a few months ago. but it's a distantly apart in the doha negotiation round in the world trade organization. the economic crisis have also brought into question faith in free trade and open markets. this has raised concerns in the united states about outsourcing and immigration. to discuss these and related issues, we have with us today for eminent analysts. their full bios are on line, but let me briefly introduce you. our first beaker will be susan g. esserman. she is a partner in the washington office of steptoe and johnson where she chairs the first international law department or prior to joining steptoe, susan was deputy u.s. tr and held three additional senior post at u.s. gr and the department of commerce during the clinton administration. david goode joins the tata sons

group in 2005. after a 34 year career at the state department. at state, david was the director of the office of india, nepal, sri lanka and multi-affairs. following a three-year stint as american council judgment in mumbai. arvind panagariya, professor of indian political economy at columbia university. as well as a nonresident senior fellow working institution. he has also worked for the asian development bank, world bank, imf, injuries capacities. he has also published extensively including a recent book i-india, the emerging giant. my colleague claude barfield is a resident scholar here at aei. is the author or editor of a number of books on trade and science policy. and has also served as an advisor to the office of the u.s. trade representative.

our format will follow the one of the prior panel. each panelist will present eight to 10 minute remarks. we will then open up the floor for questions. so with that, i will turn the discussion over to susan. >> thank you and good morning, everyone. several factors provide a stronger foundation for u.s.-india cooperation today on bilateral and multilateral trade and economic issues than has been the case in the past. first the implications of the recent indian election your second, the extent of ties between u.s. and indian business today. and third, the fact that we are building on the stork u.s.-india civil nuclear agreement. there is, therefore, a case for optimism for some progress on

trade, but there is this optimism really must be tempered by realism. i would like to highlight a couple of aspects of the election results that i believe there favorably on the potential for movement on trade and economic co-op or asian. first, is the relative strength of the vote for congress. as you all know, congress itself won 206 seats, the best result by any party since 1991. but more importantly, is the strength of the congress party within the coalition where most of the coalition partners and the third parties outside the coalition did not do as well as what was expected. this combined with the fact that the congress party's no longer shackled by the communist party gives congress much for your rain on economic and trade

issues. further, today we have a new commerce minister who is from the ruling party and also close to sonya gandhi and the leadership. by contrast, when prime minister would return to power in 1999, he was unable to move forward at all on trade, due to the position of the then commerce minister, who was from a different party, very crucial to the coalition government. so the situation is very different today. second, it is significant, particularly for potential progress on trade that there appeared to be no real backlash in the polls against congress for its engagement and embrace of its relationship with the u.s. this suggests that the government of india may be less

hesitant and less fearful of political vulnerability, if they should stand shoulder to shoulder with the u.s. on trade initiative. as some in the audience know, there is a long history of indian officials from bjp led an congress led government who got great political mileage about opposing u.s. trade policy and positions here so hopefully this vote will really help to some extent to provide courage to the trade officials. third, is the fact that we have new trade officials. actually new trade officials in both governments. this gives an opportunity, a fresh start particularly in the case of the wto that has for so long been deadlocked, and i'm going to come back to that. and from the u.s. side, we have

heard a very strong message from secretary clinton two weeks ago about the importance of the u.s.-india relationship, about the obama administration's desire to take the administration -- to take the relationship to a new level. her hopes that an expanded partnership will be the signature accomplishment of both governments and of which economic corporation is a core element. but most significantly for the topic at issue here, trade cooperation, she recognized what i think it's long been the case in this area. and as she put it, we need bilateral cooperation between our governments to catch up with the business and people to people ties. with that in mind, and with strong government in both countries, it is time for the government to seize opportunity,

to build confidence in the trade relationship, and to facilitate rather than impede bilateral business ties. first we opted to start with the basics. and that is the government should seek to resolve long-standing bilateral trade irritants on both sides. that's what i would call low hanging fruit. the indian government should seek to remove tariff and nontariff barriers particularly where there is no competition, there is no competing in indian industry. progress in this area could help him turn to strengthen u.s. advocates who seek to resist protectionism and to extend tariff preferences and expand tft for india. second, we should not hold up ambitious bilateral cooperation until there is success in the wto because i fear we will be

waiting a long time.@@@ rbú ár& negotiations. that is where in the history of our trade relationship. the convergence in this area is not surprising because there is a mutual knowledge of interest and to a flow of investment and i'm sure we will be hearing a little bit more from david good on that.

so in this area also, the government should catch up with the private sector and begin negotiations. now, the obama administration is today undertaking a review of the mottled bit. but my sense is that the negotiations between the u.s. and india in the investment area will move forward shortly, as was commonly suggested in secretary clinton's speech last week. i really do not believe that the review under way now will materially affect our country's ability to go ahead and negotiate in this area. as to the wto, new commerce minister, chambre, has initially set up very positive signals on the round. it is very good mood music. he has talked about the importance to india of

completing the round, especially in this difficult economic environment. he even said that the logjam, the impasse from last year, in the wto negotiation has been broken. he has stressed in his talks when he was here in the united states the importance of finding middle ground. and he has even offered to host a summit of the g-20 members on the wto round. i believe this is to occur in september of this year. good news is also that he will be aided by a strong and highly knowledgeable and experienced new commerce secretary. i think that can be very, very constructive. so i think we are off to a good

start. although already today, i was reading about backtracking from these initial positive signs, such as always the case with wto negotiations. and that really makes the point, which is the mood music, the tone is really essential, necessary but not sufficient. you need a new tone. you need political will, and you need to come up with reasonable compromises because as an alternate negotiation but particularly the wto, the devil, is in the detail. and here are the big question is, sonja gandhi and anand sharma, a developer around be reconciled with what the obama administration says it needs. as they have said, it is an

ambassador kirks word that it will be necessary to correct the imbalance in the current negotiations in which the value of what the united states would be expected to give is well-known, and easily calculable, whereas the broad flexibility is available to others leave unclear the value of new opportunities for workers, farmers, ranchers and business. so the real question is how do we reconcile those different positions. i think we shouldn't kid ourselves. this is not going to be easy. but the old bomb unde obama adm, will not gain the support of congress or the business community if it were to go for a

vote. obviously a deal between the u.s. and india was really only between two parties and to be successful in the round of unique instances of all 160 or so wto countries. but given the contentious history between the u.s. and india, a breakthrough or meaningful progress could have the effect of really galvanizing progress in the talks. as a final point, i think it is hard to talk about future economic corporation without mentioning the climate change issue, particularly given its prominence now and the lead up to copenhagen and the legislation that just passed the house on friday. i must say that i worry that we are headed for friction and

multilateral talks in a way that is it really familiar to those of us who have participated in wto talks. perhaps the u.s. intense engagement with china on climate could spark more involvement by india in these talks. but here again, i think that public-private partnership such as in clean energy could really help to defuse the inevitable differences that we will see in this area. thank you. >> thank you, susan. david? >> thank you very much neena. i'm really glad that i have come on after you because that was a wonderful sort of tour of the issues that we are still facing

india moving economic relationship forward. i think it will be no surprise to anybody that i speak from the perspective of indian business, which is a little bit strange for me since i spent 34 years in the state department and i have to really resist being able to speak about policy in a way that i probably wasn't able to speak about when i was in government. but for the last four and a half years i have been representing the indian corporate tata sons, who i think most of you know. there is a lot of i think disagreement about exactly where we are right now in the relationship, or exactly what the implications are and whether it is positive, parts of it are positive, parts of it are negative. i think all of us agree we are in a place now that was almost unbelievable 10 years ago. now how we got here has been the

subject of hundreds and thousands of pieces of paper and numerous talks and lectures having been given. and there are many sort of hundreds and thousands of pages yet to be presented on how we got here. but the fact that we are in a very different place, and i think generally a very positive place, is a give and i think among all of us. by the topic in the u.s. indian relations in the age of obama, and president obama to my mind hasn't spoken very much about the relationship with india. he certainly hasn't used a very pipelined rhetoric that we have all been, become used to from president clinton and president bush. but in my mind, to my mind there is every evidence that president obama is perfectly in accord with everything that has happened up until now. and he accepts this relationship as it exists now as a given. and furthermore, given obama's stress on partnership and on

coalitions and his interest, his stated interest in making progress on global problems, such as energy and climate change, ending the economic crisis, nonproliferation. it's perfectly reasonable, i think, to expect president obama to put less stress on achieving the special relationship because we are already there and more emphasis on using it to some and. and i think we got a pretty good clear picture from secretary clinton last week in her address to the u.s.-india business council because she said, and michael, my hope in president obama's hope is that the next aid in our country's relationship will see a dramatic expansion in our common agenda, and a greater role for india in solving global challenges. she then laid out a pretty aggressive, i thought, an ambitious agenda that included i think just to mention a few other things that she mentioned that india and the united states can work together towards our nuclear free world, stability in

afghanistan and pakistan, development of human potential and education, women's empowerment, health, the successful conclusion of the doha right through and climate change and the battle against terrorism. so i think you'll agree it's a pretty ambitious agenda. for this new partnership for all of these are multilateral challenges, but there is little that's been said by president obama or by secretary clinton, or anyone, in the administration about the bilateral agenda, including some of the things that have been discussed this morning. free trade agreement, the defense trade, carrying out the nuclear agreement, and i think all of these things are going to be on secretary clintons agenda on her visit to india at the end of july. and they won't be easy to resolve concerns a different context in which india and the united states have approached these issues. being the representative of a large indian firm with a large indian investment, or large

investment in the united states, i feel that i should say, and i will say something about the business and trade relationship. commentators on the u.s.-india relationship like to say that it's being driven in great measure by business, and by business that is going on between the united states and india. that business relationship is practically going on automatically. as if it's on autopilot. it is true that bilateral trade has grown dramatically, and the current u.s. exports to india are growing faster than indian exports to the united states, and indian investment in the united states is greater than u.s. investment in india. but it's not on autopilot. in fact, one of the problems is that there are too many would-be pilots who believe that the trade relationship needs to be reconfigured in the face of the current economic crisis. there's been a great deal of discussion about dealing with the recession through protectionist policies that limit economic activity in ways that supposedly protect american

industries. not surprisingly we have concerns. we meaning indian industry and we meaning the tata sons specifically. as an american, i can sympathize with any sentiment that seeks to create american jobs, but as an internationalist i also believe that such protectionist policies cannot be isolated and will eventually engender other limitations on trade around the world. earlier i mentioned a few elements of an international multilateral agenda that i think president obama intends to use to bring indian to a global solution to global challenges. and i do believe that that's the right way to go and that india and the united states should make a priority. the cleaning away of the bilateral issue that still be doubled the relationship. and if the close bilateral partnership is really going to be considered a given, which was the word that i used earlier,

then there really has to be some give in on both sides. earlier i mentioned some areas of the bilateral relationship that still needs some work, and i feel optimistic about progress under president obama. defense trade is one of the. i know that was the subject of the earlier panel. because it's important to me, and i think it was although without being named specifically, i think susan and others sort of indicated that indian guppies are very interested in pushing this forward, and i definitely agree with that. it's an area that both sides, both americans and indians, are going to benefit from. america will benefit because india can become both a major market for tens of billions of dollars in u.s. defense items, and india will benefit from the absorption of new technologies into indian industry which will in turn create new, global supply chains that will enhance

the already multinational supply base of the large american global defense company's. and the same is true of nuclear power. the u.s.-india nuclear power was truly a revolution based power agreement was truly revolutionary but it has been implemented as has been pointed out earlier more effectively between india and russia and india and france between them has between india and the united states. both defense trade and nuclear cooperation, and here i mean the building of a nuclear power plants, that india needs to provide clean, affordable fuel to its continued economic growth. by being held up by technical impasses over licensing inspection and liability. none of which is considered to be so insurmountable as to be a dealbreaker. in fact, i heard this morning for the first time that the validated end-user agreement may be in the works right now. if that's the case i'm very pleased to hear it. the cooperation as president obama envisioned it