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US Urges India to Adopt 'Fair Job Creation' Policies, Lower Tariffs - 2004-02-16

U.S. Trade Representative Robert B. Zoellick is advising India to lower its trade barriers if it wants a larger role in the global economy.

Mr. Zoellick says India must lower trade barriers in all sectors of its economy if it wants to continue to benefit from the outsourcing of jobs from Europe and the United States - a major factor in India's expanding economy.

The movement of service and information technology jobs by Western companies to low-cost countries like India in recent years has recently become controversial in the United States and has prompted proposed legislation to prevent the flight of jobs overseas.

Mr. Zoellick told reporters in New Delhi outsourcing can only be sustained if there is what he called "fair job creation" on both sides. He says this will happen if India is willing to follow the rules of free trade as it starts to play a greater role in the world economy.

"If India wants to have the ability to have outsourcing, and wants to have the ability to sell goods to the United States, well, you see, India is also going to have to open up," he said.

India has among the highest tariffs in the world on agricultural and manufactured goods. Critics also complain of restrictive trade rules in such areas as telecommunications and the financial sector. India began to liberalize its economy in 1991, but critics have repeatedly said it is not moving fast enough.

Mr. Zoellick is on a multi-nation trip to promote a restarting of the stalled world trade negotiations. He says new international agreements on lower tarrifs are needed to hasten the process of global economic recovery.

"We have to make trade a two-day street," said Mr. Zoellick. "If we are to continue to have expansion of global markets and services and agriculture, we have to open it for all."

The last round of multilateral trade talks in Mexico last year collapsed when developing countries, including India, refused to give agricultural goods from developed countries freer access to their markets. They insisted this could only happen if richer countries phased out farm subsidies.

Mr. Zoellick has already visited China, Japan and other East Asian countries, and now goes on to Africa, Europe and Latin America to explore ways to revive the world trade negotiations.