Date: Fri, 24 Sep 2004 12:41:57 -0700 From: Norm Matloff To: Norm Matloff Subject: Indian government seeks unlimited number of H-1Bs via FTA To: H-1B/L-1/offshoring e-newsletter I explained the nature of Free Trade Agreements (FTAs) under the Trade Promotion Authority the other day. See http://heather.cs.ucdavis.edu/Archive/RevivingFTA.txt The enclosed article shows how explosive this seemingly-mundane issue can be. Norm Indian Government Seeks Unlimited Guest Worker Access to US 9/21/2004 6:48:26 PM http://timesofindia.indiatimes.com/articleshow/msid-804642,curpg-2.cms Get set to jet set to Uncle Sam PRIYA RANJAN DASH TIMES NEWS NETWORK[ FRIDAY, AUGUST 06, 2004 12:03:18 AM ] NEW DELHI: India seems to have finally acquired some trade chutzpah. It is all set to offer a free trade agreement on services to the champion of free trade, the US. The offer has already been discussed between prime minister Manmohan Singh and commerce minister Kamal Nath and will be brought to the cabinet shortly. New Delhi feels the FTA deal would be a win-win for both the countries. While American banks and insurance companies can open as many branches as they wish in India, get into travel, hospitality, telecom and other service industries, Indian companies can render unhindered services in the US to American companies. Moreover, Indian professionals like software engineers, accountants and doctors can take up jobs in America without worrying about H1B quotas. Indeed, if the deal materialises, it could open the door to the vast US market for India's large pool of service professionals, particularly in the IT and health sectors, and boost business process outsourcing from the US to India. The quid pro quo would be that the US businesses would have the freedom to operate in the growing Indian market in financial services, banking, insurance, telecom and in retail trade. New Delhi would have to roll back the existing licensing and investment restrictions for US companies. Commerce minister Kamal Nath confirmed the move towards an Indo-US FTA, exclusively for services. He told The Times of India that the India-US Joint Business Council has already done some preliminary work on the proposal. "We are working on it. If there is progress, I will take it to the Cabinet for an in-principle clearance," he said. The start of the bilateral FTA negotiations, however, seems unlikely before the November presidential election in the US, trade analysts said. Thereafter, much would depend on the policies of the administration that takes charge in January next. As of now, there is little clarity about the trade policies the US would pursue in case the Democrats win the election. John Kerry, who is seen backing the backlash against outsourcing to India, has been ambivalent about free trade. If the US administration is lukewarm to India's suggestion, it would, however, show up the US as being double-faced on free trade issues. So, while at best there is considerable gain for Indian companies and professionals if Washington plays ball, at worst New Delhi would be scoring a telling political point.