negotiations very quickly quiteb

overnight because nothing negotiated with india or the united states happens overnight, but if that really could happen, then we could look to the next steps. i don't know what to say about your question about europe because i think the jury's out as to whether or not how broad the agreement that india will negotiate with europe is. i think when they initially started, the negotiators in india were very upbeat about broad subjects. i was shocked to hear them talking about investment and competition in an fta. but that was a couple of years ago. now they're stuck on a number of the tariff issues, a number of the service issues, and i wasn't, didn't realize but the latest on the general labor issues, but because of that issue i think that it's important for us to start and build the confidence in the relationship where we're not confronting so starkly some of the differences in perspectives

before, between our two countries. >> in an fta between the u.s. and india, it's quite unlikely for quite some time to come actually on both sides. i mean, on the u.s. side i don't think the u.s. will move without labor standards being an integral part of it. india would have none of that. not so far. i mean, one could possibly think of a limited one in services, but there we have no history actually on the u.s. side of doing an agreement only on services. but services is one area where you could potentially do a lot of possibilities, also, of growth in trade. one could sort of more or less standards issue on fta and services alone, but that's the maximum. the u.s. has not had a history of doing those, so i'm not quite sure how that will play out. on the indian side my take is

the first serious one for india will take forever, as we have already seen. i mean, even asean which is probably the first serious one, i mean, among the existing ones the only one i see which is, you know, a little more than simple exchange of references is india/sri lanka, but even that is ridden with a large number of exceptions, a very long, negative list and so forth. so the first test is asean, i think that would open the door on ores, but that remains to be seen. >> well, if i can open the floor for questions. yes. >> my name is dan, i'm with the council on foreign relations. i'm wondering in terms of india's trade relationships within the region, so we were talking about india, asean's,

india's look-east policy, asean plus 3, what are the nature, what is the nature of those trade relationships? india has spoken about prosiding services and other countries being better at manufacturing and things like that. when india negotiates trade agreements with these other countries, are the trade agreements really, you know, sort of assisting with those comparative advantages? what is, what does the trade actually look like between india and these other countries? is -- and who's benefiting in what ways? >> india's largest trading partner in asia actually is china, but asean is getting big also. i sort of follow trade policies a lot more closely than i follow the actual goods and services being exported. the trade relationships in asia

have grown very rapidly, so certainly there is huge scope for it to continue to grow, but other than that i'm not sure, you know, what are the actual goods. i mean, i know that india has been importing manufacturers from china big time, and india has been exporting to china largely minerals, that type of products. but to asean i'm not quite sure what the composition is. >> again, without knowing all the details my impression because of the way policy has unfolded is that growth is the recent, the growth in trade between india and the rest, southeast and east asia is within the last decade or even half decade because it's only at that point that you begin to see the country after late '90s or even after 2000 that people part of this was from the government of india itself, but part of this is from other governments,

you know, start saying, you know, we can't think about regional institutions without thinking about india. and before that you really wouldn't have done that because it really wasn't that important. and suddenly you can just see it when you're reading academic literature or you're reading the newspapers that india appears on the scene which it hadn't been before because i think most southeast asian and east asian minds india was thought of as a part of south asia. and so it was never thought that they would be part of a regional construction, and now that's no longer the case. >> i just want to say one thing looking to the future. i think everybody thinks about india as a great service power, but if you look at what india's goals are vis-a-vis the developed countries, it is actually to achieve real openings in manufactured goods. i think they feel newfound competence in their ability to compete with developed country companies, and that is where

they're going to be looking, for example, with europe and someday if they're ever going to negotiate with the united states. i think with singapore where the increase in trade has been in the services area. >> chow chen, freelance correspondent. my question would be to arvind, but other members in the panel could respond. climate change is a global issue, and change is due to the years making by the developing country the personal lifestyle and industrial manufacturing.

so what do you think, what do you think that direct country with growth change in terms of developing country? thank you. >> yeah, this is a long and complicated question. i mean, that lot of the damage to the environment that we see today was due to the, due to the emissions done by the developed countries. that's your question, right? yeah. yeah, meaning the people that have written on climate change and india, i go through this. this is as to who should pay for it, and there is a parallel in the u.s. law, of course, that, you know, when the superfund was

created precisely to collect actually taxes from the companies that had been, that had been actually the responsible parties to the love canal and other sites. and if you go by that kind of past, you know, u.s. tradition you would argue that the developed countries really ought to pay for the climate change that is happening today. now, in the other side of it argues, the other side, the other side or the opposite argument is when the developed countries, when they started emitting carbon and, you know, the industrial revolution started and so forth, nobody knew this was going to create this kind of global warming down the road, and so they never knew about it. you can argue on the other side as well, actually, that looking a lot of the times we don't know there are examples of slavery, for instance, where those really

didn't know they were going to actually damage the futuregen rations, and so nevertheless we do actually then go in and have an an affirmative action, and someone cold argue the other -- could argue the other side that the mere fact that was not to argue in favor of some sort of compensation by those who actually caused the problem. so, anyway, there is a vibrant debate on that that is a complicated issue. in the end it's going to be ultimately the solution will have to be negotiated, political solution. even setting that aside you've got the issue of the flows, future flows, who should contribute how much to the future emissions and even there actually it's a north/south problem. again, ultimately the way your question is phrased, it seems to

me in the end you're trying to get at the north/south aspect of it. and that remains on the future flows. given the fact that even by today's standards at least in per capita terms, the emissions are much higher in the developed countries than in the poor countries. so we'll have to wait and see how it goes. >> i wonder if i could add something on that because, excuse me, i don't to leave people with the impression that just because the indian government's position is that the indian emissions are so low that their responsibility is not as great as the western countries that somehow that means that india's just kind of blowing off the whole issue. it's not true. i mean, the indian government, indian businesses, indians as individuals understand the dangers from climate change, understand that they will be affected as badly, maybe even

more badly than people in the west will be. the, my company, for instance, has, takes very seriously what we consider to be our responsibilities as emitters of carbons into the atmosphere. we have our automobile company, our power company, our chemical companies, we understand that these are very large, very large polluters, and our chairman has told everyone in the company, first of all, to initiate a top to bottom review of our, our carbon footprint to determine how we can sort of improve it. and second of all, to develop new technologies that will allow us to grow and to grow our businesses and sort of produce more of what it is that we produce be it automobiles, power, chemicals, whatever it might be in a more environmentally sort of sensitive and friendly way which is one of the reasons, as i mentioned earlier, that we even

have someone in my office whose one of his main responsibilities is to identify these kinds of technologies that are being developed here in the united states that we can then take back and adapt to india to allow us to grow in a way that sort of is less damaging to the environment. so please don't think that somehow india's just blowing off the whole issue just because the official position is that india should not be sort of saddled with a lot of restrictions that are similar to those being given to the western and larger, much larger polluters, and they're taking very seriously the role, and they're going to be participating. but they'll be participating in a way that is, i think, sort of different from those that are already sort of, sort of contributing to global warming in a much larger and more, more dangerous way than india at present. >> it'll be interesting to see the indians pick up the ingenious argument of the chinese which is that you pay, you shouldn't just pay attention

to the producers or exporters such as the chinese, but actually it's the consumers in the west that are really benefiting by the quality and the price, so the consumers in the west also ought to have a responsibility for paying for some of this. if india becomes an export power, could happen. >> i think we have time for one more question. >> [inaudible] retired from the u.s. department of commerce and trade policy. one question i had was basically how does india's relationships with the bricks going to play out both in terms of competition and. [inaudible] >> i mean, currency finance is currently not a big issue, and on trade really if you ask me we all love to talk breaks, but in the end it's going to be -- you know, if you look at the progress, russia happens to be a

bit large, so it's in á@ rbáx if you look at it if i'm not mistaken, china has become india's largest trading partner, so trade side india and china their relationship has grown enormously rapidly, i think more rapidly than any other trade relationship of india with another country. so that's roughly where --

>> if i might just add to that, though, i think india's relationship with china, trade relationship with china is an interesting and complex one because at the same time that it is rapidly growing, it's filed more trade actions, many trade actions against china because going back to what i said earlier, well, india seeks to compete with developed nations in the manufactured good area, it sees china as a big threat, and india like so many countries who are negotiating in the round and really the backdrop to the wto/doha round is the fear that so many countries have of lowering their tariffs on a most favored nation basis because of the fear of competition from china. >> well, with that i think we'll conclude our economic panel.

if you'll join me in a round of applause for our panelists. [applause] we have next a keynote by ambassador blake so, please, stay seated. [inaudible conversations] good afternoon everybody if you'd be kind enough to take your seats. good afternoon everybody, for those of you joining us im danielle pletka, vice president for foreign studies at aei. one of the nicest things about a good event at aei is that daschle is hard to get people to sit down because they are all enjoying the company of the

other folks in the audience and it tells me that we have not only wonderful speakers, but an interesting and lively audiences that have a lot in common. that's one of the hallmarks of success for any and so thank you all for being here. it's my great pleasure to wealth, for the first time at aei, bob blake, who is the assistant secretary of state for sourth and central asian affairs. ambassador blake was ambassador of sir lanka prior to being confirmed as assistant secretary. pitons and a very exciting time. i think that's probably one of my under statements in regional affairs, not just because our burgeoning and import relationship with india which we have talked about so much today but because also under his 80r is pakistan the challenge of a no answer and proportion,

afghanistan which is also an exciting important challenge and a front on the war on terrorism that is being fought aggressively, in addition there's a lot of changes inside the administration as he is i'm sure working closely with ambassador holbrooke who is charged with issues in that area as well, and while i don't envy him any other bureaucracy on the seventh floor of the department of state, i am very happy to welcome him to say a few words about the issues at hand. and to tell the audience and that ambassador blake has agreed to take 10 minutes of questions at the end, no matter long -- no matter how long his disco so i'm grateful for that. ambassador blake, please thank you. [applause] >> well, thank you very much,

danielle pletka, for that kind introduction and a really is a pleasure for me to be here today at american enterprise institute. i have heard a lot about aei over the years and certainly read many great studies, and i have served for many administrations on both sides of the aisle so we really admire a lot of the work that is done here and appreciate, of course, the invitation. let me first correct a little of what she said. pakistan and afghanistan is not by a zero our ambassador holbrooke will have my head if i say that publicly but i work closely with him but he's definitely in charge of that policy in afghanistan and pakistan. i know i am the book and in this particular day that you started the conversation with ambassador sharper earlier today and i did not hear or she had today but generally speaking we are close together. in fact, have some time suspiciously so so hopefully there will at least be some daylight between what we say.

the timing of today's program i think is very opportune. in a few weeks as you know secretaries' day clinton will be going out to india to an ounce whether our indian friends, new strategic partnership between our two great nations. you're program is also an opportunity for me to tell you that secretary clinton's visit will answer some of those who are whispering that president obama's new comprehensive strategy in afghanistan and pakistan has somehow caused a diminution of india's importance to the united states. and i am here to tell you that that is absolutely not the case. on the contrary, this is a time of great optimism and of great promise in our relations with india. our two countries agree that we had to await the outcome of india's recent elections before

charting a new course in our own relations. in its strong showing of the congress party prime minister singh the new mandate and the president obama support strong support for strengthening ties with india, we think open the way for a newly invigorated partnership. so in my remarks today i will first two briefly review the recent history of the u.s. india relationship and how we got to where we are today. second, i will discuss our plans for a robust engagement with india. and then i will conclude by is an essential question of your program today which is why india and are the u.s. and india really natural allies? sulphur is how we got here and i won't spend too much time on this because i know all of you are very familiar with it. secretary of state clinton give a major speech on india about a week and a half ago at the u.s.

india business council entitled to u.s. india, three-point know, the future of u.s. india relations. and she described the three phases and relations. the first, 1.0 lasted from india's independence to the end of the cold war and was characterized by many missed opportunities between our two countries. the 2.0 chapter opened with a ground-breaking talks between the end their bitter secretary of state strobe talbott and the minister josh saying it. these open the door for president clinton, a landmark visit in the year 2000, and a significant progress in that was achieved during the bush administration highlighted by, of course, the signing of the civil nuclear deal. that agreement turned a source of friction between our two countries into a wide range of opportunities. trade and job creation, helping

india to meet its growing energy needs, as strengthening jointly the global non-proliferation regime. as the deputy chief of mission at the u.s. embassy in new delhi from 2003 to 2006, i was privileged to see firsthand the positive a fact that these important steps had in breaking down barriers between our two societies and between the two governments. and convincing skeptics of the promise of relations between our two countries. which brings us to india 3.0. president obama and secretary clinton has repeatedly stated their deep commitment to strengthening our partnership with india. and save you any as one of the key countries in a 21st century that will help shape the world of the 21st century.

and let me describe briefly how we plan to work together to expand our cooperation on a wide range of bilateral and global issues. the first is a global security. the mumbai attacks last november reminded us all that the united states and india face a common threat of terrorism and must work together and with nations around the world to combat this danger. the u.s. response to the mumbai attacks reinforced the unprecedented cooperation that has taken place between the u.s. and india on terra financing, law enforcement, training, and information sharing. in recent months the director of the federal bureau of investigation, the director of the cia, the chairman of the joint chiefs of staff, and national security adviser general jones all had visited

india to underline and strengthen that cooperation. i might add that general jones conveyed an invitation to prime minister singh to visit later this fall to washington, that is in addition to the g20 meeting that will take place in pittsburgh. still on the theme of security cooperation, we think there is room for expanded defense cooperation between the united states and india. the as india's economy grows, it is sought to modernize its military and u.s. technology can and should be a part of that modernization of. we are working hard to conclude bilateral agreements such as the monitoring agreement that will help to ensure that defense sales and military to military cooperation can continue their positive trajectory. more broadly as you have discussed this morning, economic and trade cooperation is one of the fastest-growing segments of

the u.s. india relationship. india has whether the global downturn, better than most and is projected to grow at an enviable 6% this year. although the size of the indian economy is still small relative to that of the united states, its continued growth at a time when other countries are stagnating will help the global recovery. one area of immediate promise for u.s. firms is civil nuclear cooperation. out in may the indian government said carter agreement with the international atomic energy agency entered into force and india subsequently signed its additional protocol. india was still file a declaration of safeguard facilities with the iaea in order to complete the steps necessary for nuclear regulatory commission licensing. we hope that the government of india will soon be in a position to announce to nuclear reactor

park sites that will be designated for u.s. firms. and we also hope and will approve liability protections for u.s. companies by adhering to the convention on supplementary compensation for nuclear damages. these steps would open the way for billions of dollars in new civil nuclear trade and investment. on the broader trade front while india still maintain significant barriers to u.s. trade and investment, u.s. india trade nonetheless has doubled in just the last five years. our trade deficit with india has narrowed and bilateral investment flows have also doubled. india also is a growing player inside the united states. a new study by the federation of indian chambers of commerce and industry says that indian companies acquired or invested it in 143 u.s. companies over the last two years, creating

over 30,000 new jobs. as we look ahead, both countries want to dismantle barriers to trade and investment. president obama has been clear that the united states will not use the global financial crisis as an excuse to fall back on protectionism. the u.s. was encouraged by the early visit to washington of india's new minister of commerce and industry anand sharma. e and commerce secretary gary lauck affirmed their attention to form strong bilateral ties. one early sign of that is our intention to begin negotiations on a bilateral investment treaty per gal and of the revenue picture. another is our plan to reinvigorate the ceo forum and hold our first meeting on the margins of the u.n. general assembly this year in september. secretary