U.S. attempt to forge ties with India focuses on trade

Treasury secretary hopes trip will help restore confidence in WTO


WASHINGTON -- Despite nuclear tensions and diplomatic false starts that have dogged U.S. relations with India in recent years, the Clinton administration plans to court India as an ally in trying to restart global trade talks that collapsed in Seattle last month.

The hope is that closer cooperation will help defuse the disputes between rich and poor countries that undermined the Seattle meeting.

Few expect the United States and India, the world's two largest democracies, to forge a close friendship overnight. But administration officials hope that high-level visits can send the message that the rift between developing and developed countries was confined to the chaotic Seattle meeting and did not reflect a broader breakdown in globalization.

Treasury Secretary Lawrence Summers will visit India this week for talks with senior Indian leaders on a range of international economic and financial issues, including the best way to restore confidence in the World Trade Organization.

Clinton to visit in March

Summers will pave the way for a visit to India by President Clinton, tentatively scheduled for March, administration officials said. It will be the first time a sitting U.S. president has visited India since Jimmy Carter in 1979.

"After Seattle, there's definitely an economic challenge in managing the integration between industrial and developing countries," Summers said before leaving for India yesterday. "India has had a major voice from the developing country perspective. It's natural that the two largest democracies should consider ways in which integration can be managed."

India less optimistic

India, though also eager for better ties, seems less optimistic about a breakthrough in the short term. Some Indian officials are smarting from what they characterized as U.S. pressure tactics at the Seattle trade talks.

"Both sides agree that the time is ripe to create a more positive atmosphere," said Naresh Chandra, India's ambassador in Washington. "But I think the U.S. will find that things move much faster when we're not pushed."

Administration officials hope the time is right to push ahead with diplomatic overtures to India. The two sides recently broke a long-standing logjam over bilateral trade, with India agreeing to stop requiring special permits for a range of imports.

Building cooperation

The newly elected Indian government appears set to open its market, speed up privatization of state-controlled companies, increase economic growth and reduce the tangle of regulation that has discouraged foreign investment. That should provide the basis for a steady dialogue about common interests, Summers said.

"There are a number of issues that have tended to distract us," he said. "My trip is in the spirit of building a more cooperative relationship."

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