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Angelo Paparelli on Dysfunctional Government

Give Peace a Chance: End the U.S.-India Immigration and Trade War Now

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Give Peace a Chance: End the U.S.-India Immigration and Trade War Now


The drums of war are pounding. Prominent American companies, through a variety of business associations, are urging the Obama Administration and Congress to punish the Government of India for mounting hostile actions in a brewing trade war.

For its part, the Indian government cannot be pleased with the dramatically increased filing fees and restrictions to be imposed on its technology and consulting companies (which garners about $100 billion annually for its domestic economy) if S. 744, the Senate's comprehensive immigration reform (CRI) proposal, or some comparable variant, is enacted into law.

No wonder that U.S. Secretary of State John Kerry is in New Delhi for government-to-government discussions seeking to head off a trade and immigration war that spells trouble for countless innocent parties. Prime among the collateral-damage sufferers are American consumers who benefit from lower prices (especially in light of the falling rupee) and greater technological efficiencies spawned by the global trade-in-services and trade-in-goods business models.

Why is this war on the verge of a surge? India is the world's largest democracy, an English-speaking nation not known for cyber-stealing American government and business secrets, unlike China. To be sure, Indian courts and government agencies must stop its protectionist ways, as the U.S. business associations' letter insists:

Over the last year, the courts and policymakers in India have engaged in a persistent pattern of discrimination designed to benefit India's business community at the expense of American jobs. The [Government of India] recently demanded that as much as 100 percent of its market for certain information technology and clean energy equipment must be satisfied by firms based domestically. Administrative and court rulings have repeatedly ignored internationally recognized rights – imposing arbitrary marketing restrictions on medical devices and denying, breaking, or revoking patents for nearly a dozen lifesaving medications.

These actions and others constitute a disturbing trend that may continue and even expand to other products, sectors, and countries. Already there are indications that other countries are considering similar measures. Such actions are completely at odds with recognized global norms and raise troubling questions about India's compliance with its international obligations to protect ideas, brands, and inventions and to treat imported goods no less favorably than domestic products.

These actions are unacceptable for a responsible middle-income country and rising global power to treat its second-largest export trading partner. They are counterproductive to India’s stated goals to attract capital and to develop its own innovative economy. Forcing local production and seeking to profit and create jobs through the rejection of basic property rights undermines India's ability to achieve the type of long-term foreign investment that is so essential for sustainable economic growth and job creation.

American government officials aren't pacifist observers either, but rather aggressive combatants. They've dropped bombs on India by financing U.S. border fortification with markedly higher filing fees that have fallen disproportionately on Indian companies. They've lobbed grenades by applying discriminatory and extra-legal interpretations to refuse Indian work-visa applicants, as shown here, here and here. Immigration and trade protectionism hurts American and foreign citizens far more than it helps. And now S. 744 would attempt to legislate out of existence India's global business models notwithstanding that it takes two to tango, contractually, that is, an Indian sourcing firm and its American corporate customer.

My solution: The U.S. should enact legislation granting Indian citizens eligibility for E-2 treaty investor visa classification on a reciprocal basis, just as it did a year ago with Israel. And just like the Israeli E-2 (which remains stalled), treaty investor reciprocity should only occur when American citizens doing business in India or Israel are given equivalent work-visa privileges in each respective country. The Indian E-2 could well be the olive branch that the warring Indian and American sides need to declare a truce and sue for peace.

War is hell. Give peace a chance.

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Updated 07-16-2013 at 03:18 PM by APaparelli

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