Speeches & Remarks 2005

Remarks by David McCormick, Under Secretary of Commerce for Industry and Security at the opening of the High Technology Cooperation Group (HTCG) Public-Private Forum      ( audio)

Le Meridien Hotel, New Delhi
November 30, 2005

As prepared for delivery

Introduction

I am pleased to welcome all of you to the U.S.-India High Technology Cooperation Group's Public-Private Forum on Biotechnology, Nanotechnology, and Defense Trade.  I am particularly pleased to see so many representatives from U.S. companies with us today.  And I would especially like to thank those of you who have agreed to chair the breakout sessions.  Thank you for continued commitment to the U.S.-India relationship. 
I would also like to thank the U.S.-India Business Council for their counsel and support, and Federation of Indian Chambers of Commerce and Industry (FICCI) and Confederation of Indian Industry (CII), who have done a wonderful job in hosting the forum.  Without the support of these organizations, this event today would not be possible.
 
Let me begin by saying how pleased I am to be back in India.  As many of you may know, prior to accepting my current position as U.S. Under Secretary of Commerce for Industry and Security, I was a businessman like all of you.  The last time I was in India, I, like you, was attempting to build business for my company, and I, like you, had to deal with many of the same barriers to high technology trade that we are seeking to address today.   I understand firsthand how important it is for industry to work closely with government and provide recommendations for ways to reduce barriers to innovation opening the way for growth and expanded business opportunities.  Rest assured, I intend to listen closely to what you have to say today, and in the future. 
   
U.S. and India as Emerging Partners in a Changing World    

As I mentioned a moment ago, this is not my first trip to India.  Yet, the India that I was introduced to only a few years ago was very different from the India I see today.  Each time I have been here, I am amazed to see the pace of change.  India has grown at amazing rates.  It's GDP in 2004 was the 10th largest in the world, and India's growth rate for 2005 through 2006 is expected to be over 7 percent, a welcome reminder of the growth experienced by India in the 1990s.  India's exports to the world have increased from 49 billion dollars to nearly 80 billion.  India's purchasing power has increased as well, so that it is now importing almost twice the amount of goods it was three years ago.  U.S. exports to India have increased dramatically - nearly doubling in three years from only $4.1 billion in 2002 to almost $8 billion estimated this year.  Yet only a small percentage of that trade is controlled.  Approximately one percent of U.S. exports require a license.  Of those exports in sensitive items that do require a license, 91 percent were approved in fiscal year 2005. 

As India has changed and the U.S.-India trading relationship has flourished, the world around us has changed as well.  I have spoken in the past about four trends that underlie the changes we see in the world today, all of which are factors in the success of the emerging U.S.-India partnership.  First, democracy is on the rise.  India's tradition of democracy and commitment to creating an environment that enables free people to make their own decisions provides an example for the rest of the world.  As democracy expands, so too does hope - hope for conquering tyranny and those forces of terrorism that seek to prevent freedom for all people.  In these areas, the interests of the world's oldest democracy and its largest go hand-in-hand.

Second, the spread of democracy has paved the way for the expansion of global free markets, where economic freedom and political freedom are as one.  India and the United States should be committed to establishing a free trade relationship that ultimately brings prosperity to both of our countries.  

Third, the technology revolution continues to change the world we live in at unprecedented speed.  Today, the United States and India exist a world apart, yet with the decline in cost of communication and transportation, geographical distance seems to be a barrier only to those of us who suffer from jet lag.  Unfortunately, many of the same technologies that have changed the world for the better also pose a threat of being used by terrorists and rogue nations against us.  Accordingly, implementing and enforcing strong export controls to combat the proliferation of these technologies is more important today than ever before. 

Finally, the realignment of the global political environment has reshaped our world.  The end of the Cold War, the ongoing war on terror, and the market forces that have emerged in Asia have dramatically altered the globe - economically, strategically, and socially. 
Because of these trends, the U.S.-India relationship is more important today than it has been ever before.  Since 2001, the United States and India have experienced a historic transformation in relations.  We have seen remarkable changes in the past few years, culminating most recently in the July 2005 Joint Statement, when President Bush and Prime Minister Singh declared their resolve to continue to transform the relationship between our two great nations and establish a global partnership.  The Joint Statement coincided with the completion of the Next Steps in Strategic Partnership, launched in January 2004 to provide the basis for expanding bilateral activities and commerce in space, civil nuclear energy, and dual-use technology.  In only two years, our countries were able to create the foundation for cooperation in areas that had been off limits less than a half a decade ago.   

A strong U.S.-India partnership seems only natural.  We frequently hear about the similarities between the United States and India - we are the two largest democracies in the world, both founded upon a tradition that values freedom and the rule of law, with populations that respect and understand the importance of the diversity of their populations.  But as I have come to learn in my visits to India and the discussions I have had with Indian diplomats, businessmen, academics, and thinkers of this country, both our nations share a common spirit of innovation built upon the success of our many entrepreneurs.  It is this spirit that I believe binds our two countries together and ensures the future success of our bilateral economic relationship.  And, in particular, the HTCG

The Role of the HTCG in U.S.-India Relations

In November 2002, the United States and India established the High Technology Cooperation Group to establish a framework for discussing high-technology trade issues that enabled the business community to augment the government-to-government discussions.  In this way, the HTCG is unique among other U.S.-India dialogues.  Your input is not only encouraged, but is critical to our success. 

I come to the HTCG with no pride of ownership.  The HTCG has been successful largely because of the commitment made by my predecessor, Ken Juster, and the Government of India to make these discussions a priority.  I believe this dialogue has been effective for several reasons. 

First, the HTCG has remained focused on key industry sectors that have been affected by tariff and non-tariff barriers that limit innovation and hinder trade.  Second, the HTCG has sought to address achievable short-term goals.  Third, the HTCG has attempted to be a candid and open discussion that has recognized the importance of working together as partners that share common goals.  Finally, the HTCG has been a success because of you.  Industry is best suited to identify and propose solutions to barriers to trade. 

The Future of the HTCG: Concentrating on Results

Yet, despite the success of the past - indeed because of it - the HTCG must adopt an even more results-oriented approach for the future.  The HTCG was envisioned as a group that should focus on accomplishable goals - somewhere between the 30,000 foot-level thinking and where the rubber meets the road.  We must set goals that are oriented toward achieving deliverables, and we must remain flexible by being willing to address new areas, when appropriate, and divesting our energy from areas where we are not making progress or which are best addressed through another forum.   The goals the United States and India outlined in the HTCG's 2002 Statement of Principles should remain our focus today:  lower the barriers to trade, increase access to high-technology goods, enhance nonproliferation measures, and encourage private industry participation in the dialogue.  But for the HTCG to be successful in the future, we must create specific mechanisms that encourage results, provide a means to track progress, and allow for regular and procedural follow up.

It is also important to note the critical role - the responsibility, in fact - that industry has for continuing momentum through focused execution of their part of the HTCG agenda.  The HTCG must provide a forum for meaningful feedback to government, but also tangible action by industry. 
  
Today, we are here to focus on increasing opportunities in biotechnology, nanotechnology and defense technology - all of which are sectors that are heavily regulated industries that offer incredible opportunities for both India and the United States.    

Defense Trade
Perhaps the area with the greatest potential for future growth is Defense Trade.  In the July Joint Statement, President Bush and Prime Minister Singh expressed their satisfaction with the New Framework for the U.S.-India Defense Relationship, signed by U.S. Secretary of Defense Rumsfeld and Indian Defense Minister Pranab Mukherjee as a basis for future defense technology cooperation.  In addition, the Framework included the creation of a new group - the Defense Procurement and Production Group - or DPPG - which met two weeks ago in Washington, DC, prior to the Defense Policy Group meetings.  Over the past year, delegations from the U.S. Department of Defense have come to India to discuss technology protection, the Department of State has come to discuss export control policy for sensitive military items.  Tomorrow, our two governments will seek to build on the success of these discussions. 

In the past, HTCG private sector participants have spoken extensively about ways to enhance defense trade.  In November 2004, the HTCG agreed to form a U.S.-India Industry Working Group on Defense Technology, which convened in February 2005.  And looking back at the recommendations made in the July 2003 HTCG public-private forum, I am pleased to note that many of the HTCG private sector working group's recommendations have been implemented in one form or another.  For example, the completion of the Next Steps in Strategic Partnership in July 2005 addressed many of the concerns related to export licensing policies and procedures, including a commitment to streamline U.S. licensing policies and remove certain end users from the Department of Commerce Entity List.  Moreover, there has been a concerted effort to increase the dialogue with the Indian defense acquisition community concerning Indian defense priorities and practices, in the DPPG and other dialogues. 

All of these meetings have shared a common theme of more communication, more clarity in the procurement policies of both the United States and India, and more transparency in how procurement decisions are made.  Today, I am hopeful our industry participants can flesh out in even more detailed insights and recommendations to provide a useful foundation for the government-to-government dialogue.  Tomorrow, our two governments will continue to focus on these issues.  I have no doubt that there is much more that can be done to reduce the barriers to trade in this area and to take the U.S.-India defense trade relationship to unprecedented levels.   

Biotechnology
Similar to defense technology, life sciences and biotechnology have been a focus of the HTCG since its inception.  There is significant growth potential for biotechnology in India.  India has made tremendous progress in its infrastructure development, technology base and range of production capability for biotechnology.  Yet there is much that we can do to increase opportunities in this area by addressing, for example, supply chain integrity of biological and pharmaceutical materials and expanding clinical research capacity in India.  As noted by private sector meetings in the past, the protection of data and intellectual property rights also remains a concern for many U.S. companies.  I know that speaking with industry participants in this area that there are specific, tangible ideas and suggestions for how we can make near-term gains in this area.  And we look forward to taking that feedback into the government-to-government discussions.

Nanotechnology
And in the area of nanotechnology, there are numerous issues related to the societal, ethical, regulatory and standards issues that affect this exciting new technology.  In previous forums, this group has discussed the role of export controls in nanotechnology, which is a subject that many governments throughout the world - not just the United States - are attempting to examine.   Areas of potential cooperation include the development of metrology techniques and appropriate nomenclature to enable the further international development.  I understand that patent issues related to nanotechnology are also a subject that the group today may want to address. 

As you go forward in the breakout sessions throughout the day, I encourage you to look at the issues with the goal of identifying what are the five things that government can do to assist in encouraging trade in these areas?  What key questions would you like answered?  What are the accomplishable goals - between the stratosphere and the pavement - on which we should focus?   

Accordingly, at the end of the day, I hope that we will be able to produce an action plan - for both industry and government - that provides a foundation for future action in each one of these issue areas. 

Conclusion

As I look around and see so many leaders in the fields of biotechnology, nanotechnology, and defense trade with us today, I am very optimistic that today's session will be productive. 

One of the elements of success for a global partnership will be to work successfully together to identify and resolve problems in the relationship.  We should tap into our commonality as nations of problem solvers to develop recommendations that enable us to address short-term accomplishable goals that ultimately advance high technology trade between our two countries. 

This is not to say that we will be able to match every problem with a short-term goal; undoubtedly, there will be issues that require longer-term solutions.  As with any emerging relationship, we must remember to be patient.  I recognize that in this new world where business transactions move so quickly, it is difficult for policy to keep pace.  But short-term success will build a foundation to address the longer-term objectives.
The United States is deeply committed to the emerging global partnership with India, and we are working hard to make sure that the message is clear:  our commitment goes beyond mere words.  In the past, the HTCG has provided a forum for a very useful dialogue.   But it is imperative that we turn talk into action.
 
Once again, let me thank FICCI, CII, the USIBC, and the Government of India for your hospitality.  I wish all of the participants here today good luck in your discussions, and I look forward to hearing your recommendations later today.