International Trade Daily | August 29, 2001 | By Gary G. Yerkey
The Bush administration plans to begin work with key members of Congress early next month on lifting the economic sanctions that were imposed against India just over three years ago, officials said Aug. 28.
Richard A. Boucher, a State Department spokesman, told reporters Aug. 27 that the administration was in the process of "reviewing" its sanctions policy as the United States and India move toward "transforming our relationship."
"India is becoming more and more important to the United States as it assumes a larger role in world affairs and as its economy expands to meet its enormous potential," Boucher said. "We do want to work with India's leaders to expand our cooperation ... and obviously we would want to consult with Congress about any changes [to the sanctions policy]."
Boucher said that no decisions have been made.
But other officials said that the administration plans to move quickly on the issue when Congress returns from its August recess the week of Sept. 3.
Pressure has already been building in Congress to lift the sanctions--imposed in May 1998 following India's detonation of a nuclear explosive devise--with Sen. Joseph R. Biden Jr. (D-Del.), chairman of the Senate Foreign Relations Committee, writing President Bush Aug. 24 arguing that the sanctions were becoming "ineffective."
"These measures have outlived their usefulness," Biden wrote, "and may paradoxically be impeding non-proliferation efforts rather than aiding them."
Biden called on the president to use his "waiver authority"--granted by Congress--to lift the so-called Glenn sanctions against India--named for then-Sen. John Glenn (D-Ohio), who sponsored an amendment to the Nuclear Proliferation Prevention Act of 1994 imposing the sanctions.
"India and the United States have significant opportunities for cooperation not only on security matters," but also on bilateral trade and investment," the senator said. "I encourage your administration to move forward--in close consultation with the Congress--to remove the sanctions and other policy restrictions imposed on India as a result of the 1998 tests."
The sanctions include a prohibition against assistance by the U.S. Export-Import Bank (EXIM) and the Overseas Private Investment Corp., as well as an end to military sales to India and the presumed denial of export licenses for shipments of dual-use goods and technologies (that can be used for either military or civilian purposes) to entities in India involved in nuclear or missile programs.
Karl F. Interferes, then-assistant secretary of state for South Asian affairs, said at the time that the prohibition on EXIM and OPIC activities--along with the parallel ban on loans by U.S. banks to the Indian government under the new sanctions law--"could cost hundreds of millions of dollars, affect projects already approve or in the pipeline, and could cause major U.S. companies and financial institutions to rethink entirely their presence and operations in India."
But Biden said in his letter to President Bush last week that over the past year he has a "very good" discussions with Indian government officials, including Prime Minister Atal Bihari Vajpayee.
"On the basis of these meetings, and the briefings of officials in the current and previous U.S. Administrations," he said, "I believe that a lifting of sanctions may result in a more cooperative relationship between India and the United States. I hope that if we show our goodwill by removing this irritant, India will respond with reciprocal acts of goodwill in the non-proliferation and other areas."
Biden said that, as India responds with "further positive, concrete steps of its own," the U.S. Congress will be more likely to look with favor on repealing the 1998 sanctions altogether.
Administration sources said that some public announcement on lifting the sanctions could come before or during a meeting being planned for the week of Sept. 24 between President Bush and Indian Prime Minister Atal Bihari Vajpayee, when both leaders will be in New York for the opening of the U.N. General Assembly.
U.S. officials have said that President Bush is also planning an official visit to India early next year.
Biden said that a case can also be made for waiving the Glenn sanctions that were imposed against Pakistan following its nuclear weapons test in 1998. But he said he would want to discuss with President Bush first the issue of missile proliferation from China to Pakistan before recommending the lifting of sanctions against Pakistan.
U.S. Trade Representative Robert B. Zoellick, meanwhile, has also signaled a new willingness on the part of the United State to cooperate with India, particularly in the commercial arena.
"Today, the United States wants to treat India realistically for what it is--a major country and an emerging power," Zoellick said on visit to India--the first by a Bush administration Cabinet member--earlier this month. "We want to engage India on a strategic dialogue that encompasses the full range of global issues."
Zoellick used the occasion of the visit to announce $543 million in duty-free trade benefits under the Generalized System of Preferences (GSP), saying that the United States is already India's most important trading partner and "we would like to add more to this."
Copyright c 2001 by The Bureau of National Affairs, Inc., Washington D.C.International Trade Daily:
