WASHINGTON. Apr 3: The US. while conceding that India had made commitments in banking and securities in line with international norms, has said that the country's offer on opening up insurance was "not commercially useful".

In a mandated report submitted to Congress, President Bill Clinton, while outlining his administration's 1999 trade policy agenda, said the U.S. would continue to press New Delhi "to improve its offer on insurance."

"While the, Indians made some modest commitments in banking and securities in the WTO (World Trade Organisation) financial services negotiation. iis insurance market access offer was not commercially useful," said the report, prepared by the Office of the U.S. Trade Representative.

It pointed out that the Bharatiya Janata Party (BJP)-led government had attempted to introduce insurance reform

legislation in December 1998. "but only to see it sidetracked to a select, committee in the face of violent street demonstrations instigated by the affected unions and the Communist Party."

It felt "chances are slim for passage (of the insurance bill) during the budget session of Parliament."

Clinton noted that two U.S. disputes with India were currently being worked out through the WTO panel-process and said "our ever-present list of irritants" in trade and investment with New Delhi remain.

The report said the two disputes involved TRIPS (trade related intellectual property rights) and BOP (balance of payments) import licensing and the irritants comprised problems such as automotive TRIMS (trade related investment measures), soda ash restrictions, .insurance and almonds market

access.

It said American policy goals "continue to be enhanced market access for goods and services, investment liberalisation and protection of intellectual property rights (IPR).

It complained that "India is a difficult market to access due to the lack of a stable political consensus for trade and investment liberalisation arid residual tendencies from previous regimes."

The report noted the BJP-led government is going into the 1999-2000 financial year "with a less than rosy economic performance for FY 1998 99 — GDP (gross domestic product) growth below six per cent, reduced foreign investment inflows and the gross fiscal deficit exceeding the target ratio of 5.6 per cent of GDP. causing increased GOI (government of India) borrowing and inflationary pressures."

The report blamed India and several other developing coun-

tries for blocking consensus and preventing the WTO BOP committee from coming to a decision in Washington's favour despite the International Monetary Fund (IMF) informing the committee in June 1997 that India does not have a BOP problem that justifies maintaining restrictions on imports.

The report claimed that in the U.S.-India dispute settlement consultations under the aegis of the WTO and in bilateral discussions, "despite considerable movement on the U.S. side, India was unable to match this flexibility to a degree that would produce a negotiated resolution superior to the adjudicated result of a WTO dispute settlement panel."

On the TRIPS mailbox dispute, the report said even though the U.S. had prevailed before a WTO panel in August 1997. India promulgated only in January 1999 a patent ordinance in an attempt to fulfil its TRjPS obligation.

But the U.S. found it to he WTO-inconsistent. The report said this was so because of the inclusion of compulsory licensing and "other objectionable practices."

In automotive TRIMS, according to the report. India's regime "is characterised by high applied tariffs, restrictive import licensing and WTO-inconsistent TRIMS (local content and export performance requirements)."

"There is also a general lack of market access for telecom services, even though the government of India has issued periodic pronouncements promising liberalisation." it complained. "India's participation in the WTO telecom services negotiations was uninspiring."

The report said the U.S. "expects India to reduce limits on foreign investment, accelerate access to long-distance and international telephone services and improve adherence to the

WTO basic telecom reference

acknowledging New Delhi’s efforts to liberalise the investment regime since eco: nomic reforms were inaugurated in the early 1990s, the report said many additional steps were imperative to "facilitate India's infrastructure development."

Noting India's frequent expression of interest to expand coverage of GSP (generalised system of preferences) eligible products, the report said, "however. many products of interest to India are excluded by statute, such as textiles, footwear, leather wearing apparel and other import-sensitive products."

"Some products, such as Indian chemicals and pharmaceuticals," it added, "lack eligibility because of India's failure to provide pharmaceutical product patent protection."

— India Abroad News Service