Secretary's Speech

Secretary of Commerce Carlos M. Gutierrez
Remarks to the U.S.-India Business Council
Washington, D.C.

Thank you Ron Covais, for that introduction. Indra Nooyi and Ron Somers, I appreciate the invitation to join you again this year. Ambassador Sen, Secretary Cohen, thank you for being here.

You’ve picked an important topic for this year’s summit: partnerships. It’s only through partnerships that our economies and people can reach their potential for growth, development and prosperity.

When I look out at this audience I see many people who represent our shared story of success. Those who came from India as students or immigrants have added to our rich cultural fabric.

This has made our country stronger in so many ways—in business, science, even politics. I was down in Louisiana recently where Governor Jindal is leading the people of Louisiana and making a difference in our national dialogue.

President Bush appreciates the importance of our partnership with India. We are well on our way to achieving the goal he and Prime Minister Singh set to double the amount of trade between our two democracies.

Last year U.S. exports to India surged 75 percent—faster growth than with any other major trading partner. This includes aircraft, electronics, medical equipment and more, with the private sector, including many USIBC members, primarily responsible for that growth.

This growth is in large part is due to India’s efforts to open up to the world. When you look back at history, both in America and India, there’s a trend: when we’ve lowered barriers and been open to the world, our economies have grown far faster than when we’ve kept tariffs high and closed ourselves off from global markets.

Since 1991, when then Finance Minister Manmohan Singh began sweeping reforms, India has enjoyed remarkable growth of about 8.5 percent annually. That’s more than double the growth rate from India’s independence until then. The message is clear: the faster India opens, the faster India grows.

However, we are concerned that the pace of reform appears to have slowed. We believe improvements in market access, easing of investment restrictions, tariffs reductions, and the elimination of barriers in food trade should continue because it is good for India.

India, like the U.S. must decide if it will continue the openness that has brought so much prosperity, or risk sliding backward.

While in each of our countries there are those who advocate isolationist polices, we are pressing forward with more openness and engagement. President Bush is taking this path which will grow global trade and investment.

For example, I am pleased to announce today the launch of the Department of Commerce’s India Business Center. This will provide American companies business counseling and market intelligence that’s critical to successfully doing business in India.

We are also encouraging foreign investment. We believe long-term investment by Indian companies in the United States is good for our country. Last year the Department of Commerce launched Invest in America, a federal effort to promote inward investment by helping international companies navigate our federal bureaucracy.

Inward and outward investment between our countries each increased by more than a third last year. However, investment levels are still small. We can do better.

While governments can help create an environment that promotes trade and investment, it’s the private sector—entrepreneurs, innovators and globally leading companies— that create jobs and get products and services to market. We also know that it’s our workers, consumers and citizens that reap the overwhelming rewards of increased commerce.

And it’s our partnerships that facilitate that commerce. Partnerships such as: the U.S.-India CEO Forum; the U.S.-India government-to-government Economic Dialogue; and the High Technology Cooperation Group, whose success is due in large part to USIBC and its Indian industry partners.

Consider that in 1999, nearly a quarter of U.S. exports to India required an export license—today it’s just two-tenths of one percent. Clearing away red tape is critical to innovative economic development, and the cooperation group has helped do just that.

We’re also expanding our high-technology partnership through the Validated End User program, which will soon be “rolling out” in India. The VEU program holds tremendous potential to increase trade in sensitive items to companies with a record of using them exclusively for civil purposes.

None of these initiatives could be successful without the cooperation of Prime Minister Singh’s government, and especially Minister Kamal Nath.

The United States and India are two great democracies. And we know that our systems require compromise for the greater good. Sometimes our leaders have to make tough choices that are in our long-term national interests.

For example, President Bush pressed for the civilian nuclear agreement with India against strong opposition because he’s committed to our long-term strategic partnership.

Now India needs to make some tough choices.

Indeed, rising demand for energy is an issue that our countries can’t ignore.

We believe it’s essential to quickly implement the landmark civilian nuclear agreement and bring India into the international nuclear nonproliferation mainstream. The benefits for India are obvious, and we hope that India’s government will quickly move forward to fully realize the potential of this historic agreement.

The United States remains committed to being India’s partner in providing clean, sustainable energy. While this includes nuclear power, it also means using other clean energy technologies.

Led by Assistant Secretary David Bohigian, the Department of Commerce has conducted two clean energy missions to India, and we’ll be leading another this fall.

The global food shortage is another issue in which countries like ours must cooperate.

Many countries have unilaterally lowered food tariffs in response to the rising food crisis. Yet many of these countries balk at eliminating these same tariffs within the Doha negotiations.

Here's where national interests could be linked to the global good. By making permanent agriculture reforms, we can boost farm trade and expand access to food.

Global agriculture trade reform involves getting everyone at the table—developed and developing economies alike.

Nothing could immediately help the world's poor more than completion of a meaningful and ambitious Doha Round. This would further open markets and opportunities for all and lift millions out of poverty.

This is why we need India’s help. India is a major leader, not just among developing nations, but across the whole world. We can’t have a successful Doha Round without India’s leadership.

While success at Doha is critical, together we can also make progress in addressing impediments to economic growth including reducing shortages of food.

Right now, we can help lower food prices by producing more and allowing markets to operate more effectively and efficiently.

Opportunities exist in India to lower costs and increase choices in banking, finance and insurance, where barriers remain high.

And the strengthening of pharmaceutical data and intellectual property protection will allow for the full development of the distinctive brand names and the innovative high technology companies that India wants to create and attract.

For our part, we believe now is time to take our partnership to a new level.

One thing is for sure: when we work together, when we trade, when we lower barriers, and when we partner, it improves our economies in a world that has no shortage of competitors.

Trade is more important to growth in both our countries than ever, and it’s through being open, leading and being engaged that we will find solutions that will keep our economies growing in the long-term.

On behalf of President Bush we look forward to actively engaging in all of these partnerships because when we do, it makes our two great countries stronger and more competitive.

Thank you.