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Panel likely on free trade pact with US

Our Bureau

NEW DELHI, March 7

THE Vice-President and Director, the Brookings Institution, Dr. Richard N. Haass, has expressed the hope that one of the outcome of the US President, Mr. Bill Clinton's visit to India will be the setting up of an expert committee to assess the possibilit y of a US-India free trade agreement.

Addressing a meeting organised by the Confederation of Indian Industry (CII) here on Tuesday, Dr. Haass said that such an agreement would work out to the political, strategic and economic interests of both the countries.

Apart from thinking in terms of free trade agreement, the US and India must work together towards the progressive elimination of both tariff and non-tariff barriers to trade, he said.

In this respect, Dr. Haass said that the US, though one of the most open economies in the world, did have pockets of protectionism, like in textiles. He urged the US Government not to take any unilateral action in the area of trade or sanctions, as trade issues were best solved in multilateral or bilateral fora.

Dr. Haass said that the US-India relationship must be institutionalised to a greater degree. He urged the two countries to work together on important non-WTO multilateral issues, such as what should the criteria be for World Bank and IMF intervention.

He said that India need not worry about US investors finding India unattractive, provided the right investment atmosphere could be instituted and maintained.

Dr. Haass further felt that the World Trade Organisation (WTO) is not the right forum for solving issues related to environment and labour. He said it will be unfair to expect trade agreements to be able to address these issues, and it is better to solve them in specialised forums.

In the case of labour standards, the International Labour Organisation (ILO) should continue to be the nodal agency, he said. In the case of environment, a Kyoto-like forum, (or more than one such forum) should be set up to deal with this issue, Dr. Haas s said.