Speeches and Remarks 2007
The Honorable Carlos Gutierrez
U.S. Secretary of Commerce
FICCI
February 13, 2007
(
Audio)
Secretary Gutierrez: Thank you very much for the kind introduction. Minister Nath, it's a pleasure to be with you again. And officials from FICCI, thank you very much for hosting this, and thank you all for being here.
I've been to India before and I've done business here in the past. This is the first time I've been to India as Secretary of Commerce, so it really is an honor and I can tell you that the United States government and President Bush and his whole administration places a great deal of priority and importance on our relationship with India. It is a very important relationship, it is a very strategic relationship, and as Minister Nath mentioned, it starts out by being a friendship and everything else follows from that.
While the President's visit last March was a visible example of the priority, the ongoing shared values, our commitment to democracy, the enhanced engagement on all levels signifies the great importance of our partnership.
Under Secretary for International Trade Frank Lavin who is with us today recently conducted the U.S. government's largest business development mission ever before in our history and that mission was here to India.
We appreciate FICCI's work with us on the Mumbai Business Summit and the commercial dialogue events that were part of that overall mission.
My visit this week serves to reinforce our commercial interests in India and also to discuss the challenges our two nations face in growing our relationship and expanding upon our economic successes.
The Indian economy, as you well know, has made impressive strides in recent decades. Growth along in India's economy in 2005 is equivalent to the size of the Indian economy 35 years ago, so the progress you have made has captured the world's attention and has captured the world's imagination.
The U.S. is India's largest trading partner and through November that partnership was worth $29 billion. India exports $20 billion to the U.S.; the U.S. exports $9 billion to India.
This evening we're going to receive the final U.S. trade totals for 2006. I'm sure those show once again very robust growth in the U.S./India relationship.
The Commerce Department is working to enhance our commercial and strategic partnerships. There are numerous opportunities for engagement -- everything from oceans research to patents and trademarks and all of those relationships and everything that we can do together is designed to create growth, efficiency and jobs on both sides of our economies.
One specific area of success has been the U.S./India High Technology Cooperation Group which is a key dialogue that has helped advance high tech trade and collaboration. The HTCG is a unique partnership between government and industry which has delivered tangible results. Today less than one percent of U.S. high technology imports to India require an export license. In 1999 it was 25 percent, so we've come a long way and we have achieved very meaningful and tangible results.
Next week's meeting of the HTCG is an opportunity to capitalize on the momentum of the emerging U.S./India strategic partnership. Deputy Secretary Samson looks forward to hosting Foreign Secretary Menin and his delegation in Washington, D.C..
Our nuclear agreement, our Civil/Nuclear Cooperation Agreement is an historic step forward. I believe that years from now people will look back at this agreement and see it as a major step forward in our relationship. Perhaps we don't see that today, but in the future it will be seen as perhaps the event, the step that took our relationship to a whole new level. U.S. civil/nuclear companies are eager to partner with Indian companies and once all necessary steps toward civil/nuclear cooperation are taken, there will be abundant opportunities for Indian and U.S. businesses together to develop the Indian nuclear power sector and partner in other markets. Business is part of the agreement, it's part of the cooperation, but it's not the only part. I know that you see it the same way. This is a very important signal that our relationship is strategic, that our relationship is long term and that we recognize the importance of India in the world stage.
Clean energy is another area in which we can partner for commercial and environmental success. In April the Commerce Department will lead a Clean Energy Technologies Trade Mission to India and that is also a very important step.
As you know, India is a member of the Asia Pacific Partnership on Clean Development and Climate. The APP was initiated by President Bush, Prime Minister Singh and the leaders of Australia, China, Japan and South Korea. In the next decade India plans to add electricity, power, energy capabilities to 18,000 remote villages. So it's a very ambitious plan and we believe that we can contribute. We believe that U.S. companies can help.
U.S. companies produce world class environmental technologies that can help India meet the needs of its rapidly growing economy while reducing air pollution and enhancing energy security. So we're very excited about this. We're very encouraged by India's plans and we believe, again, we believe that U.S. companies can contribute.
As I mentioned, India, and as you well know and you've been an important part of creating it, India has had impressive economic growth. In 2005 the economy of India was worth $800 billion. The Indian economy has grown at a stunning nine percent and unemployment has been trending downward.
I was reading on the way over on the plane a quote by Prime Minister Singh. He said that the best cure for poverty is growth. We mention that very often. In the U.S. we talk about that, that there is no substitute for growth. And as we think about the need for social programs and we think about the need for environmental programs, we realize that the best way to be able to achieve them is through growth. There is no substitute for growth and you are achieving that growth. You're achieving the type of growth rates that very few nations in the world ever experience. I congratulate you for that. You have unlocked the key to solving so many problems that countries around the world face.
U.S. exports to India are up 25 percent and investment is up significantly. This has been possible because India has made important reforms which have encouraged private investment and free enterprise.
I mentioned before that we do $29 billion of trade. That's a lot of trade. That's a lot of money. But we know that we are just getting started. We know we can do so much more. We can use the power of the private sector, the power of free enterprise to create jobs and prosperity and growth for both our economies.
We applaud efforts to allow more foreign investment, reduce tariffs protect intellectual property and liberalize air travel. In fact the flight I took into Delhi was allowed through the Open Skies Agreement which has now been in place for two years. This is a concrete example of a reform which has had an immediate impact on improving our ability to connect and to do business.
We know that more needs to be done. There are some sectors -- whether it be banking, financial services, telecommunications, retail -- where opportunities still exist. Any time we see hurdles, any time we see protectionist policies, and I say we -- the U.S., India and other countries around the world. We should ask if they are contributing to the creation of jobs. If they are contributing to the creation of prosperity.
We know that India has made progress on intellectual property rights. We know that enforcement is the key. The important thing is that we recognize that we still have a long way to go. We all have a long way to go but we can't stop heading in the direction that we have started because there is great opportunity for all of our citizens if we continue down that road.
Without protecting patents and data India will not be able to achieve its full potential and we believe that the potential of India is vast, it is limitless. One way to achieve that potential is by attracting R&D and we know that in order to attract R&D and innovation sectors such as pharmaceuticals are critical, and for pharmaceuticals data protection and the protection of intellectual property is absolutely critical. So you have started down that path, please don't stop because there is great prosperity down the path of data protection.
Nearly three-quarters of U.S. software in India we believe is pirated, and there are countries around the world where that number is 80, 90 percent.
Again, if there is one country in the world that is renowned for software skills; if there is one country in the world that can become a powerhouse for software it is India. And part of doing that will be continuing to drive for intellectual property rights protection in your country.
There are many countries around the world that are struggling with this. We believe that those countries that can create an environment where investors know that intellectual property rights are protected, whether it be in pharmaceuticals, in software, in the film industry, those countries will have an advantage in attracting investment.
The Indian entertainment industry will also benefit from stronger IPR enforcement. Bollywood is endlessly creative and innovative. The Indian artists and performers who invest in creative pursuits deserve the benefit of protection for their intellectual property.
The challenging regulatory climate continues to hamper commercial opportunities. While there are many success stories, we know there are many stories of failed partnerships and business ventures. Unfortunately, those are the stories that are used as examples so we have opportunities and the important thing is to stay focused.
Earlier this month there was an article in the Wall Street Journal that chronicled some of these challenges. We believe that India needs to continue to make choices that will ultimately expand and grow opportunity for its citizens. For India to continue its phenomenal growth it must continue to open all areas of its economy and encourage investment, both foreign and internal. I know that you're doing that at a certain pace. You're doing that at a pace that is allowed by democracy. The important thing is that there is a vision in the country to move toward a direction that will guarantee growth, that will guarantee a continuation of that amazing growth that you've already achieved.
India's not alone in its challenges. In the U.S. we too are working to keep opening international markets and to ensure that there is access to our market and that there are different choices for our consumers. It's interesting, but in the international marketplace at a time when everyone is realizing that the global economy has a lot of potential and the global economy can provide huge benefits, at the same time there are local protectionist sentiments. We see that in the U.S.
One point that I find myself constantly making in the U.S. with our Congress, with different constituents, is that we have seen throughout our history that protectionism doesn't protect. It's actually quite an irony. But protectionism doesn't create jobs and doesn't protect jobs. It's a little bit of a contradiction. What does create jobs and what does protect jobs is to attract investment, to attract free enterprise, to develop a strong private sector, to encourage innovation, to encourage a focus on human capital, to encourage training, and most of all to compete. It's quite a bit of an irony that the best way to protect is to engage and to compete, and that we have seen time and time again, as I'm sure you have, and many countries are learning that experience, that protectionism does not protect.
That is something that at a time when we're beginning to see such tremendous opportunities and world engagement, that is a point that I find that I have to make very often in my country and I'm sure you find yourselves having to explain that same concept.
One way to promote innovation is to expand the minds of young scientists and engineers through enhanced educational opportunity. India is a crucial partner for the U.S., and American universities that have been educating Indians for years see that as a great link and a great opportunity to strengthen our relationship.
American doors continue to welcome students from India. In fact there are more students from India in the U.S. than any other country in the world, and we are proud of that. We believe that that strengthens our bond, it strengthens our friendship and it strengthens our understanding.
In addition to education, opening markets throughout the world also helps us compete and create jobs. Businesses in India and the U.S. have responded with tremendous enthusiasm to the new opportunities created by opening up our markets.
In the U.S. we are trying to create an export culture. We are trying to motivate companies to export, to engage, to go outside of our boundaries and find new markets and I'm sure you're doing the same and I'm sure you're finding that there are tremendous opportunities in creating that kind of an entrepreneurial culture.
One final area that we are working on together which will expand international markets is to make progress on the Doha Round of trade negotiations. That's probably the single biggest thing we can do together to help poverty around the world. There is so much discussion about aid and helping countries grow. The single biggest thing we can do to lift people throughout the world out of poverty is to have a successful Doha Round.
Our estimates are that a successful negotiation can lift 500 million people around the world out of poverty. So there is a lot at stake in the Doha Round of negotiations.
We believe that because of India's leadership, because of how India is perceived among developing nations, because India is watched and India is seen as a trend-setter, that we cannot achieve a successful negotiation without India. India's leadership is required. I believe that many countries are on the sideline waiting to see what India does.
So there is a great opportunity here to demonstrate India's leadership not only with the developing world, but with the world at large. I am looking forward to working with Minister Nath and all of you to achieve a successful conclusion.
Time is short and a great deal remains to be done. If we are going to show progress in the Doha Round we need to do it quickly. As you all may know, Congress needs to renew our Trade Promotion Authority in order for us to continue, and in order to get Trade Promotion Authority we need to demonstrate that there is real, tangible progress to be made in Doha.
So I can't stress enough how much is at stake here and what a tremendous opportunity it is for leadership, for the two great democracies of the world to demonstrate leadership in Doha. I think it's the kind of thing that will be remembered for many many years to come.
We are extremely proud to be India's partner. We believe that we can do a lot not just for our countries but for the whole world. That's probably the true essence of leadership.
Some years ago our founding fathers -- your founding fathers and our founding fathers -- had the vision and the foresight to put us on the track of democracy. That's what makes us unique in the world. We both have tremendously vibrant democracies. We both have tremendously energetic societies because of our commitment to democracy. And I believe that the one single thing that can describe what makes the 21st Century so exciting in the first six years of that 21st Century is the partnership between India and the U.S.. That is what makes this a very new century.
We've always had a partnership, we've always had a relationship, but now we have a strategic partnership. Now the two great democracies of the world are getting closer and closer together. That's what gives me tremendous hope for a great 21st Century.
I want to tell you on behalf of President Bush, on behalf of his Cabinet, on behalf of businesses, on behalf of the American people, we are proud to call ourselves India's friend and we look forward to strengthening our relationship and demonstrating to the world how democracies can lead and why the course of democracy is truly the best.
So thank you very much for your friendship, thank you very much for your leadership. We look forward to working with you. Thank you.
[Applause.]
Moderator: You have just heard a very scintillating address by the Secretary of Commerce. I think he reemphasized the strategic partnership between India and the U.S. and what Honorable Minister Kamal Nath mentioned about the friendship. That's the kind of sentiment which they did express that the U.S. is India's friend and India [inaudible] the U.S. as a friend.
You highlighted that protection does not protect, and I think in India we have seen over the last three years the liberalization which has taken place as Minister Kamal Nath already mentioned, that every year we add 25 million people to the middle class.
I think with these few words we would invite some very few questions for the Secretary and Minister Kamal Nath.
Question: My name is [Jae Abnicha] representing ABCO Worldwide. Thank you so much for your insight Secretary Gutierrez and also Minister Nath.
I think you know that we are entering an era when corporate social responsibility has an increasing role in affecting how a company is perceived in terms of their reputation, image and ultimately their bottom line. How do you think this trend is going to be affecting how U.S. companies see opportunities for investment in India?
Secretary Gutierrez: Thank you. I agree. I believe it is a new trend. Corporations have always had a sense of social responsibility but I think now they see it as something that is quite strategic. We're beginning to see funds in Wall Street that invest in companies that demonstrate social responsibility. What I see very often is that not just in what companies contribute in terms of donations, but companies' contribution to developing people, to training people, to giving people a sense of Ameritocracy, to contributing to the well being of society I think is something that has probably not been fully recognized throughout the world. It's a tremendous opportunity for many many companies.
In many countries around the world the contribution that I see from businesses goes well beyond just selling product. It's what they do to the people who work in the companies, it's the environment they give them, it's the opportunities they give them.
So I think it's a great point and still an opportunity to have businesses be recognized for what they are doing.
Question: Sir, I represent the [inaudible] industry. India needs a tremendous amount of technical input in terms of standards and compliance assessment. In the world today consensus standards, the U.S. leads the rest of the world in all areas including meeting oil measurement and a whole host of areas. We need to go forward in signing agreements between the Indian government and the U.S. government and other agencies to ensure that we are able to handle a non-tariff barrier in a much more effective manner. Because if India is to go forward and it is to catch up with the rest of the world at today's pace it will probably take about 50 years more, so we need to sign agreements on standards and compliance assessment in a far more effective way.
So India needs to overcome bureaucratic barriers. The United States government needs to goad all its agencies to come forward and be free with their intellectual property rights.
Secretary Gutierrez: Thank you. We talked about that this morning. Opportunities for collaboration in technology, for collaboration in standards. The point you're making is very important. Standards should not be used as a competitive tool. There are countries around the world that are setting their own standards as a way to protect industry and what they're doing is shutting themselves out from the rest of the world. So point well taken, and we have discussed that.
Question: We have had the American National Standards Institute come to India and we are in the process of a dialogue, but that dialogue needs to be strengthened and made --
Moderator: Thank you very much. Please be brief in asking the question.
Question: Thank you very much. The Honorable Minister mentioned about SMEs. If we need to speed up the process of this, there used to be earlier a revolving fund created between the U.S. and India. It was administrated in this very building by the USAID earlier. That $20 million fund is finished long back now. I would strongly recommend, because I am also handling a couple of American companies here, in very very high technology areas. To validate those technologies you need to create a revolving fund in India.
Secretary Gutierrez: For small and medium enterprises? I think the reciprocity, what we have to do is yes, we need to find ways to have small and medium enterprises come to India and Minister Nath, that was one of the points that he made this morning. We also need to find ways to show small and medium sized companies that they are welcome, that they should be coming over, that they should be exploring India, that India is perhaps the greatest opportunity they can find anywhere in the world. So I think we need to do both, and one goes hand in hand with the other.
I don't know about the USAID fund. I don't know what the status is of that. That is a State Department function. But there's no question that we need to find ways to promote investment by small and medium sized industries and we need to send a message to them, that they are welcome, that their capital is welcome.
Moderator: I think there are many of you who would ask a question, but I will take the last question because of time.
Question: Secretary Gutierrez, my name is [Alu Bos], I am an advocate of the Supreme Court of India and a special advisor to [Inaudible] Services which as you know is the leading IT and software company in Asia.
There are two points that you highlighted -- software development and intellectual property rights. An area where the two nations can work closely together.
I would like to [mung] the idea of the two Commerce Departments forging some kind of a commission to combat piracy worldwide. I would like to have your ideas on that. And here I would only like to give a very Churchillian message, a very small message to all the pirates of the world, that we have no truck or parley with you or your grisly kind. You do your worst, we'll do our best. [Laughter.]
Secretary Gutierrez: I like that idea. We have an opportunity to establish a special partnership where we send a message to the world that India and the U.S. are working together to stamp our piracy. I think it's a great idea and we'll take that up.