“The United States should not sit idly by as the Indian
government enacts regulations that harm American industry and
jobs,” Stephen Ezell, senior analyst at the Information
Technology & Innovation Foundation (ITIF), said in a paper.

Congress should start to remove India from the U.S.
Generalized System of Preferences (GSP) program, which waives
duties on most goods from developing countries, and direct the
U.S. International Trade Commission to investigate “how India’s
mercantilist policies damage the U.S. economy,” he said.

India was the top recipient of GSP benefits in 2012, with
some $4.5 billion in imports from that country entering the
United States duty-free. The entire GSP program expires at the
end of July, creating an opportunity for lawmakers to tinker
with the program as they work on its renewal.

The U.S. House of Representatives’ Ways and Means Committee
recently held a hearing where it heard a slew of complaints
about India’s industrial policies.

India is the United States’ 13th largest trading partner,
with two-way trade totaling $62.9 billion last year.

But that is not as large as it should be “because of
entrenched trade barriers and other unfair practices” that make
it difficult for U.S. companies to compete in the subcontinent,
said Ed Gerwin, a senior fellow at Third Way, a policy think
tank, during a panel discussion on the ITIF paper.

The ITIF paper listed several actions taken by the Indian
government that it said were aimed at “stripping” foreign
biopharmaceutical companies of valuable patent protections.

In essence, Indian government policy allows its generic drug
manufacturers to “free ride” on the research and development
costs of foreign drug manufacturers, former U.S. Trade
Representative Charlene Barshefsky said.

In just two of several high-profile cases, India issued a
license to allow generic production of Nexavar, a cancer therapy
drug researched and developed by Bayer in the United
States, and denied Novartis’ patent application for
the cancer drug Glivec, even though nearly 40 other countries
approved it, the ITIF paper said.

In the electronics sector, the Indian Ministry of
Communications and Information Technology has imposed local
content requirements for government and private sector purchases
that have “security implications for the country,” potentially
blocking foreign equipment manufacturers from a huge section of
the Indian market, the paper said.

India’s record has made it “the current outlier when it
comes to intellectual property protection,” said Mark Elliot,
executive vice president for the U.S. Chamber of Commerce’s
Global Intellectual Property Center. “Indian law, when it comes
to protecting IP, is mostly lacking,” he said.

“To realize the huge benefits this deal could bring will take ambition and political will. That means everything on the table, even the difficult issues, and no exceptions,” Cameron said at a White House news conference with President Barack Obama.

France last month threatened to block the proposed free trade talks unless cultural sectors, such as television and radio, were excluded from the agreement.

The European Parliament’s influential trade committee voted a week later to leave all of Europe’s cultural and audiovisual services out of the negotiations due to start in July, a decision that will shape the negotiating mandate to be agreed on by trade ministers from the EU’s 27 member states.

The Motion Picture Association of America, in comments filed last week with the U.S. Trade Representative’s office, urged the United States not to agree to any “up-front, blanket sectoral exclusions,” but acknowledged EU sensitivities on the issue and said there were limits to what it expected from the talks.

“We recognize the importance of cultural diversity and the contribution the audio-visual sector makes to achieve that goal … We want, in particular, to make clear we are not calling into question existing EU or national financial support measures and mechanisms for the audio-visual sector,” the industry group said.

BRITAIN’S FUTURE IN THE EU

Britain, which is in the midst of a national debate over whether to stay in the EU, is hosting the annual summit meeting of the Group of Eight leading industrial economies next month in Northern Ireland.

That gives Cameron a high-profile platform to help shape the negotiating mandate for the talks with the United States and to shore up support in Britain for remaining in the EU.

Leading EU states Germany, France and Italy are also members of the G8 along with Japan, Russia and Canada. The presidents of the European Commission and the European Council, two EU executive branch institutions, also attend G8 summits.

“President Obama and I have both championed a free trade deal between the European Union and the United States. And there’s a real chance now to get the process launched in time for the G-8. So, the next five weeks are crucial,” Cameron said.

Cameron has promised to renegotiate Britain’s relationship with the EU and hold a referendum on membership if he wins the next election in 2015. But that has failed to stop his party’s divisions over Europe or halt the rise of the anti-EU UK Independence Party.

Asked if the United States was concerned over Britain’s possible exit from the EU, Obama said the issue was ultimately one for the British people to decide but he backed Cameron’s plea for time to make reforms.

“I will say this, that David’s basic point that you probably want to see if you can fix what’s broken in a very important relationship before you break it off makes some sense to me,” Obama said.

“I think the U.K.’s participation in the EU is an expression of its influence and its role in the world, as well as, obviously, a very important economic partnership,” he said.

(Additional reporting by Jeff Mason; Editing by Vicki Allen and Cynthia Osterman)

“This is something we cannot let stand. It needs to have a full investigation,” House of Representatives Intelligence Committee Chairman Mike Rogers, a Michigan Republican, said on “Fox News Sunday.”

“I don’t care if you’re a conservative, a liberal a Democrat or a Republican, this should send a chill up your spine,” Rogers added.

In a practice that drew complaints during the 2012 general election campaign, non-profit advocacy groups with the words “Tea Party” or “patriot” in their names were flagged for closer review by the Internal Revenue Service when they applied to the agency for tax-exempt status. Such groups may focus on issues, but may not directly support any candidate.

“This is truly outrageous and it contributes to the profound mistrust that the American people have in government,” Senator Susan Collins, a Maine Republican, said on CNN’s “State of the Union.” “The president needs to make crystal clear that this is totally unacceptable in America.”

Collins said she also doubted the IRS’s claim that the groups were targeted as part of an “inappropriate” organizing technique by a few bureaucrats in the agency’s tax-exempt section, rather than for political reasons.

“I just don’t buy that this was a couple of rogue IRS employees. After all, groups with “progressive” in their names were not targeted similarly,” Collins said.

“If it had been just a small group of employees, then you would think that the high-level IRS supervisors would have rushed to make this public, fire the employees involved and apologized to the American people and informed Congress,” she said.

NEW HEADACHE FOR OBAMA

An IRS official has apologized for the practice, which has embarrassed the tax-collecting agency and poses another potential headache for the Obama administration at a time when Republicans continue to raise questions about the administration’s actions related to the deadly assault on the U.S. mission in Benghazi, Libya, last September.

Lois Lerner, director of the IRS tax-exempt office, said on Friday that revenue agents in Cincinnati targeted the conservative groups “without talking to managers” and that politics had played no role in the screening.

The Cincinnati staffers were trying to deal with a crush of applications for tax-exempt status by using key words to get through the paper work faster, she said.

About 300 applications initially were flagged for closer scrutiny. Of those, 75 were chosen for that treatment based on the presence of the key words in their names. Lerner said none of the applicants was denied tax-exempt status.

The Treasury Department’s inspector general for tax administration is to release a report on its investigation into the issue within a few days.

White House spokesman Jay Carney has called the closer scrutiny of the conservative groups “inappropriate,” and has said he expected the inspector general’s investigation to be thorough and lead to changes at the IRS.

Rep. Rogers said an outside investigation was needed to get to the root of the matter, referring to IRS statements last year that no groups had been targeted for additional scrutiny.

“I don’t know where it stops or who’s involved … (The investigation) has to be external. It’s clearly shown that they can’t do it themselves. And I think Congress needs to have that oversight,” Rogers said.

Representative Darrell Issa, a California Republican, requested the IRS inspector general report last year after accusing the IRS of targeting conservative groups.

He has vowed to investigate, and the House Oversight and Government Reform committee he chairs has the power to issue subpoenas.

At least one other congressional panel intends to hold hearings, giving Republicans multiple opportunities to hammer the agency and the White House over the IRS affair.

(Editing by David Lindsey and David Brunnstrom)

Pre-clearance allows U.S.-bound passengers to get advance approval to enter the United States from locations in airports outside the country.

“We question whether the Department (of Homeland Security) has the authorization to enter into such an agreement, and we are concerned by the precedent set by the Department’s action,” 11 senators said in a letter to Homeland Security Secretary Janet Napolitano, dated on Wednesday.

The United States has pre-clearance centers at 15 locations in Canada, Aruba, Bermuda, the Bahamas and Ireland, according to the U.S. Customs and Border Protection (CBP) website.

The arrangements with Canada and the resort islands date back to the 1950s and 1960s, and the arrangement with Ireland to the 1980s, with modifications over time.

“The Pre-clearance Agreement with the UAE will enhance our aviation security by allowing U.S. security officials to screen passengers before they board flights bound for the United States,” Jenny Burke, a spokeswoman for the CBP said.

The pact underscores “our commitment to protecting the safety and security of our citizens while also streamlining legitimate travel and commerce,” she said.

Airlines for America, the main U.S. industry group, has complained the agreement will divert U.S. customs resources to the UAE when they could be better used to ease congestion at domestic airports.

“Reducing wait times at U.S. airports should be a top priority of DHS and CBP, not using U.S. tax dollars to benefit a foreign government, particularly when wait times at U.S. points of entry continue to be excessive,” group President Nicholas Calio said in a statement.

The senators said their understanding was that the UAE will pay up to 80 percent of the cost of operating the facility at Abu Dhabi’s airport, which is the hub for UAE-owned Etihad Airways.

The airport “is not served by any air carrier based in the United States,” their letter said.

“By establishing foreign-funded pre-clearance operations at an airport with so little traffic bound for the United States, we question whether the Department is choosing pre-clearance locations based on risk or a pay-to-play process,” they said.

They pressed Napolitano to “clarify the rationale for allowing a foreign government or entity to pay for core security functions.”

A U.S. official said the reimbursement provision of the pact would be used to improve CBP operations, leading to shorter wait times at U.S. points of entry.

The two sides have agreed on the outlines of the program, but details needed to be worked out before pre-clearance can start in the UAE, the official said.

(Reporting by Doug Palmer; Editing by Philip Barbara and Xavier Briand)

“We’ve launched this strange animal called TTIP (‘tee tip’),” EU Ambassador to the United States João Vale de Almeida said at a reception to mark Europe Day. “This is a game-changer. As I like to say, this is the mother of all free trade areas.”

The two sides are expected to begin talks on the pact in July and hope to finish in one to two years. If successful, the final agreement would cover half the world’s economic output and about a third of global trade.

The proposed pact “sends a strong signal … that despite our economic challenges (in the EU and United States), we are all open for business and trade,” EU foreign policy chief Catherine Ashton told the group.

“I was recently in China. (They) were very, very interested in what this meant, not just for us, but also for them,” she said, in an apparent reference to Chinese concerns the agreement could adversely affect their exports.

The United States is already negotiating another free trade agreement called the Trans-Pacific Partnership with 11 countries in the Asia Pacific region, so there is symmetry in the moniker for the proposed U.S.-EU pact.

But Ashton still said it was “bizarrely named … I call it a free trade agreement. I can’t get my head around TTIP.”

Whatever it is called, negotiations are expected to be tough, with EU lawmakers already backing French demands to exempt cultural and audiovisual services, which would be a big disappointment for U.S. film and television companies.

Members of the U.S. Congress also want the pact to tackle longtime barriers to U.S. farm products, potentially requiring many European countries to overcome their aversion to importing U.S. genetically modified crops.

It will be “a long difficult process of negotiations. We have of course the best negotiators on the European side. But we respect a lot the American negotiators,” Vale de Almeida said to laughter from the crowd.

Last week, President Barack Obama nominated Mike Froman to be the next U.S. Trade Representative, effectively charging his longtime friend and chief international economic affairs adviser with the task of completing the U.S.-EU deal.

(Editing by Doina Chiacu)

“If we do not again confirm Mr. Hochberg before July 20, we
run the risk of leaving the bank without a quorum to act on many
of the transactions before it, which will hurt American workers
and exporters,” Johnson, a South Dakota Democrat, said at a
hearing on the nomination.

The Ex-Im Bank provides loans, loan guarantees and other
types of financing to help big U.S. companies such as Boeing and
GE, as well as many small and medium-sized U.S. companies, to
export their goods around the world.

The bank needs a quorum of at least three of its five board
of directors to approve transactions. In addition to Hochberg,
the terms of two other board members expire in July and
President Barack Obama has not yet nominated replacements.

The conservative free-market group Club for Growth tried
last year to persuade Congress to shut down Ex-Im Bank, which it
views as government welfare for big corporations.

But after U.S. business groups such as the U.S. Chamber of
Commerce and the National Association of Exporters rallied to
the bank’s defense, lawmakers in both the Senate and the House
of Representative voted on a bipartisan basis to renew Ex-Im’s
charter through September 2014.

Club for Growth’s strategy this year is to encourage
like-minded lawmakers to block action on Hochberg and other
Ex-Im nominees to deny the bank an operating quorum.

That would “threaten the export sales of the thousands of
U.S. companies and the hundreds of thousands of American jobs
that depend directly or indirectly on the Ex-Im Bank’s export
financing,” the U.S. Chamber and a dozen other business groups
said in a letter to the Senate Banking Committee last month.

At the hearing on Tuesday, Johnson noted in 2009 the Senate
unanimously approved Hochberg’s nomination on voice vote, less
than a month after he was nominated.

“I am hopeful that the Committee and Senate will once again
move as expeditiously,” Johnson said.

While politicians from President Barack Obama on down love to tout the job-creating benefits of exports, they spend much less time praising imports, which many Americans associate with shuttered factories and the move of jobs overseas.

The report from a consortium of business groups said the facts are otherwise.

“Imports are not the bogeyman some Americans believe them to be,” the report from the U.S. Chamber of Commerce, the National Retail Federation, the Consumer Electronics Association and the American Apparel and Footwear Association concluded. “It is time to give imports the credit they deserve.”

The report comes as several pieces of U.S. legislation that waive duties on imports are up for renewal in Congress.

Those measures include the Miscellaneous Tariff Bill, which waives duties on a long list of raw materials and other products used by U.S. manufacturers, and the Generalized System of Preferences program, which eliminates duties on goods from poor countries.

In addition, the United States is negotiating free trade agreements with countries in the Asia-Pacific region and the European Union that are expected to phase out tariffs on nearly all imports from those areas.

The report was prepared by Trade Partnership Worldwide, a consulting firm, which looked at the economic impact of eliminating imports, which totaled $2.2 trillion in 2011, by imposing a prohibitive tariff.

It estimated the United States had about 3.76 million fewer jobs in manufacturing, agriculture, forestry, fisheries and mining in 2011 than it would have had without any imports.

It also found the imports supported more than 19 million jobs throughout the rest of the economy in services sectors such as retail, finance, insurance, education, health care and utilities, and in construction and government employment.

The notion “that exports are good and imports are bad” is grounded in a 1960s view of the world, when companies were much less dependent on global supply chains, said Laura Baughman, president of Trade Partnership.

“It’s really hard to find anything anymore that’s completely made in the U.S. or in China. So, the whole picture about imports and the role they play in the U.S. economy (has evolved). They were always important, but now they are more important than ever,” Baughman said.

More than 60 percent of U.S. imports are products such as machinery, industrial supplies and materials such as oil that either are not produced in the United States or are not available in sufficient quantity to meet demand, she said.

Imports also drive down costs for businesses and consumers, helping keep inflation low, and provide a “constant incentive to U.S. manufacturers to improve quality and develop new, more innovative products,” the report said.

The U.S. Chamber of Commerce is solidly behind Obama’s goal of doubling exports in five years to more than $3 trillion by the end of 2014, said John Murphy, vice president for international affairs at the business group. “But it’s a good thing to stop one week out of 52 to talk about the other side of the trade equation,” he said.

The study also comes as many U.S. business groups are celebrating May as World Trade Month.

The chamber’s chief executive, Thomas Donohue, was in Peru on Monday to promote trade flows with the United States and drum up support for an Americas-wide body of business groups designed to help shape economic policy-making throughout the hemisphere.

He planned to meet with Peruvian President Ollanta Humala before going to Uruguay to talk to President Jose Mujica. Economic growth in both countries has been exceeding that in many of their peers.

“Presidents Humala and Mujica both represent a pragmatic, pro-business mindset currently shaping the economic outlook of countries across Latin America,” Donohue said.

(Additional reporting by Terry Wade in Lima; Editing by Chris Reese)

Froman, if confirmed by the Senate, will take the reins as the top U.S. trade ambassador in time to oversee the expected completion of a landmark free-trade agreement, the Trans-Pacific Partnership pact between the United States, Japan and 10 other countries.

The United States and the 27 countries of the European Union are also preparing to launch talks on the proposed Transatlantic Trade and Investment Partnership, a free-trade agreement that would cover half of world economic output.

“The new USTR has both enormous opportunities and enormous challenges that have to be reckoned with,” said Charlene Barshefsky, who held the post in the late 1990s under former President Bill Clinton.

Obama will make the announcement at 10:00 EDT (1500 BST), the official said. Reuters reported last week that Froman was in line for the job.

Froman, whose connection to Obama goes back to their days on the Harvard Law Review, is already well known in diplomatic circles for his role in leading U.S. preparations for more than a dozen international economic summit meetings.

He also oversees the administration’s economic engagement with China, India, Brazil, Russia, Japan and the European Union and the development of economic strategies for the Middle East and Africa.

The official said Froman had been asked to play a continuing role at the White House on international economic issues.

By moving to USTR, the former Clinton administration official will be elevated to Cabinet status and focus his portfolio more narrowly on trade.

In addition to establishing trade rules for the 21st century through the two regional agreements, the United States must develop better strategies to stop theft of corporate trade secrets and intellectual property that drive economic growth.

Froman needs to “infuse the trade agenda in every aspect in the ways in which U.S. competitiveness can be enhanced and U.S. innovation can be protected,” Barshefsky said.

ENTHUSIASM FOR CHOICE

The former Citigroup executive is widely respected by both Republicans and Democrats.

“Froman is a superb choice and will bring both energy and experience to the post … (It is) good news for all those wishing to see a more globally engaged United States,” said Dan Price, who was chief international economic affairs adviser for former President George W. Bush.

Barshefsky, who like Price spoke with Reuters in anticipation of an announcement, was equally enthusiastic.

“He knows the issues. He has a high degree of experience. He’s exceptionally intelligent and obviously committed to a more open, equitable global economy,” Barshefsky said.

One of Froman’s biggest challenges will be meeting the goal of finishing the Trans-Pacific Partnership talks by the end of the year. Japan recently joined the negotiations but will not actually participate formerly until the 18th round in July, increasing doubts of a deal this year.

The United States and the EU also hope to finish their free-trade talks on “one tank of gas,” to use Froman’s term, meaning in just one to two years. But long-time regulatory differences over issues such as genetically modified crops will make that a difficult negotiation as well.

In the meantime, there are efforts to breathe life into the moribund Doha round of world trade talks by reaching a deal to cut red tape from customs-clearing procedures at the December meeting of the World Trade Organization in Bali.

The United States is also pursuing deals with a subset of WTO members to liberalize international trade in services and to cut tariffs on an expanded list of high-technology goods.

During his confirmation hearing, Froman is likely to face questions on how forcefully Obama will push for “trade promotion authority.” That legislation, also known as “fast track,” allows the White House to submit trade agreements to Congress for straight up-or-down votes without any amendments.

The trade law tends to divide Democrats in Congress between those who see trade agreements as an engine for economic growth and those who blame them for manufacturing job losses.

Congress last passed a trade promotion authority bill in 2002 after a bitter fight in the House of Representatives.

The Obama administration recently said it was now prepared to work on a trade promotion authority bill, even though Obama did not seek it during his first term.

(Editing by Philip Barbara)

Froman, if confirmed by the Senate, will take the reins as the top U.S. trade ambassador in time to oversee the expected completion of a landmark free-trade agreement, the Trans-Pacific Partnership pact between the United States, Japan and 10 other countries.

The United States and the 27 countries of the European Union are also preparing to launch talks on the proposed Transatlantic Trade and Investment Partnership, a free-trade agreement that would cover half of world economic output.

“The new USTR has both enormous opportunities and enormous challenges that have to be reckoned with,” said Charlene Barshefsky, who held the post in the late 1990s under former President Bill Clinton.

Obama will make the announcement at 10:00 EDT (1400 GMT), the official said. Reuters reported last week that Froman was in line for the job.

Froman, whose connection to Obama goes back to their days on the Harvard Law Review, is already well known in diplomatic circles for his role in leading U.S. preparations for more than a dozen international economic summit meetings.

He also oversees the administration’s economic engagement with China, India, Brazil, Russia, Japan and the European Union and the development of economic strategies for the Middle East and Africa.

The official said Froman had been asked to play a continuing role at the White House on international economic issues.

By moving to USTR, the former Clinton administration official will be elevated to Cabinet status and focus his portfolio more narrowly on trade.

In addition to establishing trade rules for the 21st century through the two regional agreements, the United States must develop better strategies to stop theft of corporate trade secrets and intellectual property that drive economic growth.

Froman needs to “infuse the trade agenda in every aspect in the ways in which U.S. competitiveness can be enhanced and U.S. innovation can be protected,” Barshefsky said.

ENTHUSIASM FOR CHOICE

The former Citigroup executive is widely respected by both Republicans and Democrats.

“Froman is a superb choice and will bring both energy and experience to the post … (It is) good news for all those wishing to see a more globally engaged United States,” said Dan Price, who was chief international economic affairs adviser for former President George W. Bush.

Barshefsky, who like Price spoke with Reuters in anticipation of an announcement, was equally enthusiastic.

“He knows the issues. He has a high degree of experience. He’s exceptionally intelligent and obviously committed to a more open, equitable global economy,” Barshefsky said.

One of Froman’s biggest challenges will be meeting the goal of finishing the Trans-Pacific Partnership talks by the end of the year. Japan recently joined the negotiations but will not actually participate formerly until the 18th round in July, increasing doubts of a deal this year.

The United States and the EU also hope to finish their free-trade talks on “one tank of gas,” to use Froman’s term, meaning in just one to two years. But longtime regulatory differences over issues such as genetically modified crops will make that a difficult negotiation as well.

In the meantime, there are efforts to breathe life into the moribund Doha round of world trade talks by reaching a deal to cut red tape from customs-clearing procedures at the December meeting of the World Trade Organization in Bali.

The United States is also pursuing deals with a subset of WTO members to liberalize international trade in services and to cut tariffs on an expanded list of high-technology goods.

During his confirmation hearing, Froman is likely to face questions on how forcefully Obama will push for “trade promotion authority.” That legislation, also known as “fast track,” allows the White House to submit trade agreements to Congress for straight up-or-down votes without any amendments.

The trade law tends to divide Democrats in Congress between those who see trade agreements as an engine for economic growth and those who blame them for manufacturing job losses.

Congress last passed a trade promotion authority bill in 2002 after a bitter fight in the House of Representatives.

The Obama administration recently said it was now prepared to work on a trade promotion authority bill, even though Obama did not seek it during his first term.

(Editing by Philip Barbara)

USTR designated Ukraine a “foreign priority country,” the worst label in its annual report on how well countries around the world protect U.S. patents, copyrights and other forms of intellectual property rights.

No other country received the black mark.

The trade office previously designated Ukraine a foreign priority country in 2001 and repeated that designation through 2005. During that period, Ukraine was suspended from the U.S. Generalized System of Preferences (GSP) program, which waives imports duties on thousands of goods from developing countries.

“We can’t prejudge what would happen this time, but GSP revocation is certainly one of the possible actions,” a senior USTR official said in a briefing before the report.

Ukraine earned its opprobrium this year “due to its severely deteriorating climate for IPR protection and market access,” Acting U.S. Trade Representative Demetrios Marantis said. “(I) and call upon that government to reverse recent backsliding and swiftly resolve the problems identified today.”

The two countries developed an action plan in 2010 to address U.S. concerns. Those include use of illegal software, Internet piracy and market access barriers – specifically actions that have prevented “copyright collecting societies” from collecting royalty payments from users of copyrighted material and distributing them to the owners.

“Instead of making progress, all of those problems grew worse over the past year,” leading to the decision to revert to the “priority foreign country” label, the senior U.S. trade official who briefed on the report said.

U.S. media companies hailed the USTR move.

“Software piracy (in Ukraine) remains rampant, including significant unlicensed software use by government agencies,” said Eric Schwartz, counsel for the International Intellectual Property Alliance, a U.S. business group.

Another big problem is the high-quality camcording of films in Ukraine’s theaters that are uploaded to top pirate sites and distributed across the Internet, Schwartz said.

(Reporting by Doug Palmer; Editing by Doina Chiacu)