India Rebuffs U.S. Trade Sanction Threat

From Reuters

India, isolated on Washington’s trade hit list for erecting barricades against foreign competition, insists that it will not negotiate under threat of retaliation.

Officials on Monday declined to comment on India being cited by the United States as an unfair trader for the second straight year, pending an official response to Washington.

But Prime Minister Vishwanath Singh told reporters over the weekend that India could not overlook its social priorities and would never negotiate trade treaties under threat.

Other Asian countries have been put on a “watch list,” mostly for not protecting copyrights and patents, but escaped the threat of trade sanctions by negotiating with Washington over its trade gripes, Asian diplomats said.


President Bush, in a statement released by the White House Friday, said India again would be named under the so-called Super 301 clause of the 1988 Trade Act because issues cited last year remain unresolved.

The Bush Administration cited India for obstructing foreign investment and refusing to allow U.S. companies to do business in the nationalized insurance industry.

Japan and Brazil were also branded unfair traders by the United States last year, but were taken off this year’s list.

“Threats of retaliation are things of the medieval past,” Commerce Minister Arun Nehru said earlier this month. “We don’t negotiate under threat.”

The United States, India’s largest trading partner, will decide in six weeks whether to slap punitive tariffs of up to 100% on Indian exports.

Raunaq Singh, president of the Federation of Indian Chambers of Commerce and Industry, said Monday that India had taken gradual steps to open up to foreign investment and imports.