core sector communique

State's Blake on U.S.-India Strategic Dialogue

U.S. Department of State

Remarks by Robert O. Blake, Jr.

Assistant Secretary, Bureau of South and Central Asian Affairs

Washington Foreign Press Center

Washington, DC

June 14, 2012

Readout of the U.S.-India Strategic Dialogue

ASSISTANT SECRETARY BLAKE: Well, thank you very much. I appreciate the introduction and thank you all for coming. It's nice to see a lot of old friends in the crowd today. I'll provide a readout, not just of the Strategic Dialogue, but really the whole week because we've had a great many different dialogues over the course of the last five days. So let me just briefly summarize some of those.

One was the Science and Technology Joint Commission meeting that was chaired by the President's Science Advisor, John Holdren, as well as India's Science and Technology Minister Deshmukh. Second was, of course, the Higher Education Dialogue chaired by Secretary Clinton and Minister of Human Resources Development Kapil Sibal. The third were regional consultations that were held earlier today between Foreign Secretary Mathai and Under Secretary of State for Political Affairs Wendy Sherman, and then also our Global Issues Forum that is probably still going on between, again, Foreign Secretary Mathai and Under Secretary Otero.

And then last but not least was, of course, the Strategic Dialogue itself. You all heard Secretary Clinton and External Affairs Minister Krishna describe the progress that we are making. Secretary Clinton remarked that the strategic fundamentals of our relationship are pushing our two countries into ever closer strategic convergence, and she highlighted progress in five separate areas. Since we're celebrating Global Economic Statecraft Day today, let me start with the economic piece of it.

The Secretary remarked that bilateral trade between our two countries is up 40 percent since we began our Strategic Dialogue three years ago, and it is on track to exceed what we hope will be a hundred billion dollars this year. In addition, we want to advance our negotiations on the Bilateral Investment Treaty, and of course, we want to continue to do everything we can to reduce barriers to trade and investment in both directions.

The Secretary welcomed the Memorandum of Understanding that was signed between Westinghouse and India's Nuclear Power Corporation, committing both sides to work towards early works agreements on things like preliminary licensing and site development that will be needed to begin construction work in Gujarat. She also noted that General Electric is also making progress in its talks with NPCIL. The Westinghouse MOU marks a very significant step towards the fulfillment of our landmark civil-nuclear cooperation agreement. The Secretary finally described in this area how we have mobilized more than $1 billion in clean energy finance for projects of various kinds. You've all heard me describe in the past how OPIC and Ex-Im and others have extremely large programs in India as a result.

The second major area of cooperation and progress was in the area of science and technology. The Secretary described how our joint commission is working to improve our linkages in sciences, engineering, and data-sharing. And she also welcomed the agreement concluded earlier this week to share the U.S.-India Open Government Platform software that is promoting transparency and accountability, and we're very pleased to welcome a third-country partner, our first third-country partner, which will be Rwanda, and we hope to, of course, welcome many, many more.

The third area of cooperation was in the area of education and people-to-people ties. And again, the Secretary welcomed the progress that both sides have been making in the Higher Education Dialogue to increase educational exchanges and strengthen ties between our universities with a particular focus on community colleges.

Fourth, on security and defense cooperation, Secretary Clinton highlighted progress in the fight against violent extremism, our growing security cooperation both on the military exercise front but also on our bilateral trade, defense trade, which now exceeds $8 billion.

And finally, in our cooperation in South and East Asia, the United States welcomed India's contribution towards building a stable, secure, and prosperous Afghanistan, including its more than $2 billion in assistance that it is providing. The Secretary thanked the Indians for hosting on June 28th a very important investment conference that will take place in Delhi to galvanize more international private sector investment for Afghanistan to look ahead to the transition there. She announced our intention to have a U.S.-India-Afghanistan trilateral dialogue. And the U.S. welcomes India's support for our participation as a dialogue partner in the Indian Ocean Rim Association for Regional Cooperation.

We have a lot more information on all of the things that we have talked about and negotiated. You will have all seen the very lengthy joint statement that we put out. And then I also just wanted to call your attention to four different fact sheets that we put out in the areas of energy and climate change, public health and research, science and technology, and security and regional cooperation. So you'll find a wealth of really terrific information in all of those as well.

So with that, I'd be happy to take some of your questions, including those from our friends in New York who I understand are joining us as well.

MODERATOR: All right. As we move to the question-and-answer session, please wait for the microphone, identify yourself by name and media organization, and we'll start over here on the right, please.

QUESTION: Thank you. Chidu Rajghatta, the Times of India. Ambassador, about the trilateral on Afghanistan involving Afghanistan, U.S., and India, how do you expect to get around Pakistan? And at any point, was a quadrilateral considered? And why not a quadrilateral?

ASSISTANT SECRETARY BLAKE: Well, I think first of all, we want to start with a trilateral. First off, we start with a bilateral, and so of course we have very good bilateral dialogues with - well, each of us with Afghanistan. We've each signed strategic partnership agreements. So there's a great deal to talk about with respect to Afghanistan. This is certainly not in any way seen as directed against Pakistan. On the contrary, it's to talk about the situation inside Afghanistan, but also how we continue to support Afghanistan and the very important three transitions that are going to be taking place - not only the security transition, but the political transition, because Afghanistan will be holding very important elections in 2014, and then the equally important economic transition that you've heard me talk about a great deal.

So we haven't really yet talked about the details of this since we've just agreed on this trilateral consultation, but we'll be doing so in the days and weeks ahead.

MODERATOR: All right. Sir, we have a question from New York, so we'll go ahead and turn the audio over to them. New York, go ahead.

QUESTION: Yes, good afternoon, Assistant Secretary. Thank you first for giving the opportunity to ask a question. And basically, as it has become the threat for not only Bangladesh, also for the regional peace and security, is there any formula for a permanent - I mean, to - for the permanent solution of the Rohingya issues in Myanmar and in Bangladesh borders?

ASSISTANT SECRETARY BLAKE: Is there any permanent formula? Is that what you said?

QUESTION: Yes. I mean any formulas to solve this problem permanently.

ASSISTANT SECRETARY BLAKE: Well, I think we're focused right now particularly on the Rohingya situation as it affects Burma. As you know, there's been a lot of ethnic fighting between - inside Burma, and several have sought refuge in Bangladesh. And we have urged our friends in Bangladesh to provide humanitarian access and to honor their international obligations to do so. And we hope they will because, again, I think many of these are fleeing potential violence, many need medical assistance, and many others will need access to shelter and food and water. So Bangladesh has a long history of accommodating the Rohingyas, and we hope that they will continue to do so.

MODERATOR: We have a question here in the front.

QUESTION: Seema Sirohi, Firstpost.com and Gateway House.

Mr. Ambassador, I was wondering if this agreement signed between Westinghouse and NBCIL, does it mean that your issues with the nuclear liability law are resolved? Is there - has that been taken care of? And the other question is --

ASSISTANT SECRETARY BLAKE: Sorry, let me answer that question first, Seema.

QUESTION: Okay.

ASSISTANT SECRETARY BLAKE: No, it doesn't mean that the issues with respect to liability law are resolved. But I think both of our countries wanted to show that we still share a strong interest in seeing these commercial contracts come to fruition. We do have, still, some concerns about the liability law. But the signing of this MOU and the future conclusion of early works agreements will provide very concrete evidence of our intention to move forward, and particularly from our perspective, the interests of our companies in continuing to work with NPCIL to develop the very promising opportunities in this - what will be a $40 billion sector.

QUESTION: I have another question.

ASSISTANT SECRETARY BLAKE: Please.

QUESTION: On India's desire to negotiate a totalization agreement with the United States, the minister said that you don't even want to talk about it. So what's going on? Why doesn't the U.S. want to talk about it and be fair on this issue?

ASSISTANT SECRETARY BLAKE: Well, this is a legal question for us as well. There's a great imbalance in our systems right now, and so there are legal restrictions on what kind of agreements we can enter into with partner countries. But certainly, we have a dialogue with this and we understand the importance of this issue to our Indian friends.

MODERATOR: We'll take our next question in the back on the left, please.

QUESTION: Aziz Haniffa with India Abroad and Rediff.com. Piggybacking on Chidu's question on Afghanistan, sometimes you come to regret what you wish for. Earlier, there was a perception by - in India that India was being kept out of the whole process because of pressure from Pakistan, et cetera. Now you guys seem to be going overboard in terms of trilateral commissions and everything else.

Is India going to be left with the baby in the bathwater in terms of responsibilities - because the Taliban is still a major force there - in terms of security also?

ASSISTANT SECRETARY BLAKE: Well, I think, first of all, Aziz, I would take issue with the premise of your question, which is we have not always welcomed the important role that India has played in Afghanistan. I don't think you'll ever - if you go back years and years, you'll not hear criticism from me or any other spokesman talking about India's role in Afghanistan. And we continue to welcome that across a broad range of what your country is doing, not only in terms of the assistance program that I talked about, the investments that are taking place in things like that Hajigak iron ore facility and deposit, but then also the very important support that India is providing in terms of private sector investment and, more broadly, the whole concept of regional integration. So we very much welcome India's strong support for Afghanistan in all of these areas, and as Secretary Panetta said during his trip, we also welcome India doing more in terms of training, particularly the ANS

F and police training back to Indian facilities in India itself.

As we look ahead to the transition, we are very focused on showing to Afghanistan that there will be strong international community support for all of these transitions that I just mentioned. So you've heard me and many, many other people talk about what we are calling the transition dividend, but also the "transformation decade," as we say, of the next decade, 2014 to 2024, where we hope very much that the international community will continue to be very engaged not just in helping to support the ANSF, but also to provide the economic assistance that Afghanistan will need to develop. And so I think this upcoming conference that's going to take place in Tokyo on July 8th will be a very important milestone in, again, looking forward to the economic piece of what I just talked about.

QUESTION: But a quick follow-up --

ASSISTANT SECRETARY BLAKE: So we're certainly not leaving India to - in Afghanistan. We're all going to be working very closely to help support Afghanistan.

QUESTION: But as a quick follow-up, is there going to be a security dimension too at this conference? Because the Taliban is still a major force. There has no - been no vanquishing of them, you know?

ASSISTANT SECRETARY BLAKE: Right.

QUESTION: And of course, elements of Haqqani and others have been responsible for attacks on the Indian Embassy in Kabul, et cetera.

ASSISTANT SECRETARY BLAKE: Well, there's not a direct security focus. It's obviously - there's an economic focus. But the more success we have in developing private sector investment to developing private sector jobs and sustainable jobs for Afghans, of course, that will help to undermine the appeal of the Taliban. So in that sense, there is a security aspect to it.

MODERATOR: We'll take another question here on the right.

QUESTION: Thank you. This is Lalit Jha from Press Trust of India. Welcome here to the Foreign Press Center.

ASSISTANT SECRETARY BLAKE: Only one question, Lalit. (Laughter.)

QUESTION: This is the fun part. (Laughter.)

QUESTION: Let's begin with the follow-ups. The two follow-ups I have - (laughter) - on Afghanistan, at what level do you think this dialogue is going to be? And have you spoken to Pakistan or informed Pakistan that this is what you're going to do, the trilateral consultations between India, Afghanistan, and the U.S.?

ASSISTANT SECRETARY BLAKE: Sorry, let me answer that because I won't remember them. (Laughter.)

We haven't yet. As I say, we're just beginning to think about this and talk to both India and Afghanistan about how we're going to structure this dialogue. So we haven't made a decision yet about things like the level. But yes, we did have some contacts with the Government of Pakistan.

QUESTION: On Rohingya, Bangladesh, you know as a poor country it doesn't have much resources. Is the U.S. willing to help or provide some kind of financial assistance to Bangladesh to take care of the refugees that are coming across the border from Burma?

ASSISTANT SECRETARY BLAKE: Certainly. And normally, the way this works, Lalit, is that UNHCR, the UN High Commission for Refugees, has - is supporting assistance efforts there. They have their own camps, but also they work with NGOs. So we typically respond to an appeal from the UNHCR. So if the UNHCR determines that it needs more resources to help Bangladesh to accommodate these refugees, then I'm sure that we will be more than happy to accommodate that request, because the United States, as you know, is always one of the most generous and early supporters of these kinds of appeals.

So again, Bangladesh will not be facing this problem alone. We understand that these kind of things impose a burden on countries and a cost on countries, so again, we hope very much that they will open their borders and allow people in and that UNHCR and others will be permitted to work very closely with the Bangladeshi authorities to accommodate those new refugees.

QUESTION: And my question: Was China factor discussed during the Strategic Dialogue? Because in the last couple of years, I have seen all the joint statements, but U.S.-China Dialogue didn't mention to South Asia. And India-U.S. Dialogue, there is some mention to China. In this joint - 14-page joint statement, there's no reference to China at all. Even the briefing, there has been no reference to China. So was this discussed or have you kept out of it?

ASSISTANT SECRETARY BLAKE: Well, China was discussed. I don't want to say China was a focus. I mean, we were much more focused on things like Afghanistan and so forth. But as you've heard me say before, both India and the United States want a good, strong engagement with China, and we don't see our strategic partnership as coming in any way at the expense of China. And so, again, I think it was more in that context. And we will continue to look for opportunities to engage bilaterally with China, but also, as you know, we have offered a trilateral dialogue with China as well that we hope that they will agree to.

MODERATOR: All right. We have a few questions on the left. We'll start in the back.

QUESTION: Thank you. Kitty Wang (ph) with NTD TV. Regarding deepening the defense cooperation with India, did you heard any concern from the Indian part in the dialogue such as increased U.S. military presence there or deployment there?

And also, could you talk a more about your cooperation with India on the cyber security aspect?

ASSISTANT SECRETARY BLAKE: We didn't hear any complaints, if that's what you're asking about, any kind of military presence. Whenever we have a military presence, it's only at the invitation of the Government of India. And for - typically for our bilateral exercises - as you know, we have the largest program that India has with any country of bilateral military exercises. We certainly welcome those opportunities.

So we talked a little bit about that, but we also talked about how we both want to continue to try to work to expand our defense trade, particularly to take it into new areas like co-production and co-development.

MODERATOR: All right. We'll take another -

ASSISTANT SECRETARY BLAKE: Sorry. You have one more question? Go ahead.

QUESTION: Yeah. Regarding the cyber security, how will you defend --

ASSISTANT SECRETARY BLAKE: Oh, yes. I mean, we had a good discussion on cyber security. To be honest, I don't want to get too much into the details of what we talked about for understandable reasons, but, again, I think we see this as a very important new area of cooperation, not just because of our very large IT sectors that each of us have and the growing cooperation in that area in terms of the service industry, but also in terms of the threats that each of us face as well. And so we - again, we have common interest in sharing best practices and again, addressing those. But again, for obvious reasons, we don't want to go too much into the details of that.

MODERATOR: All right. We'll stay here on the left.

QUESTION: Thank you. Raghubir Goyal, India Globe and Asia Today. Mr. Secretary, two questions: One, is how much Pakistan was discussed, because Minister spoke about this yesterday at the media conference with the Indian media? He was not very happy the response he got from the U.S. as far as - many terrorists are wanted by India from Pakistan who were involved in Mumbai attacks, and also he spoke about Headley, among others. So response is not very good from Pakistan, and Pakistan is still helping those, Haqqani Network and all that are against India.

And second, my question will be: As far as U.S.-India Business Council and -

ASSISTANT SECRETARY BLAKE: Sorry. Let me answer the first one - question. Well, I didn't see the Minister's comments, but let me just say that we had a good conversation. We obviously share India's concerns about some of the threats that are emanating from Pakistan, from groups like Lashkar-e Tayyiba. And we're working very hard to - both to encourage Pakistan to take action against those, but also to prevent those kinds of attacks from occurring through our intelligence and other kinds of cooperation.

With respect to your question about David Headley and things like that, that's really the province of the Department of Justice, and so I'd refer you to them. But as a whole, I would just tell you that there's been very good information exchange between our two countries on - with respect to Mr. Headley and others. And we are very firmly committed to continuing that information exchange and certainly to sharing any kind of threat information the instant that we get it, because that is - that, of course, is extremely important to the security of India, but also to - an important part of our counterterrorism cooperation.

QUESTION: And second question will be on economy and trade. Since two countries, India and U.S., are the world's largest and richest democracy, both are moving towards (inaudible) trade, economic, and other issues. But visa is a major issue among those U.S.-India Business Council and 500 Fortune companies doing business or who wants to do business in India and also vice versa, companies from India. One, are you moving forward as far as free trade agreement with India, just like you have with South Korea and other countries? Because since when you are saying that India is the most moving forward partnership now in the future? And finally visa, how far these companies they are seeking and asking more visas and but you are cutting visas rather than giving them more visas to do business in India - to do business in the U.S. Thank you, sir.

ASSISTANT SECRETARY BLAKE: Okay. There are a lot of different questions in that question. So let me try to unpack those a little a bit. (Laughter.) First of all, with respect to visas, you're - I think you're referring primarily to H1-B visas and, as you well know, India now receives 65 percent of the worldwide total of H1-B visas. So I think that's a pretty commendable number and percentage and in terms of the L-1 visas - the so-called intra-company transfer visas - India receives 37 percent of those -- again, 37 of the worldwide total. Congress is the one that determines the caps for H1-B visas, not the United States Government. So - and that cap has remained fairly steady for quite a long time now.

So, again, I think we're doing everything we can within our own, within the law to give Indian companies fair access to the H1-B system, and I think that they have shown themselves more than capable of taking advantage of all the opportunities, and we continue to welcome those kinds of workers. And the real quibble, if I might say, has been more on the L-1 - the intra-company transferees where the number of - the rate of rejections has gone up slightly. And we have a refusal rate that's gone up a little bit because we've seen a higher level of unqualified applicants and in some cases some fraud. So naturally, we want to make sure that everybody that comes in is a qualified applicant and is coming for the purposes that are stated in the visa application.

So we're looking at why that refusal rate seems to have gone up a little bit more but - in response to the concerns that have been raised. But again, I'm a strong supporter of all of our consular officers and think they do a superb job.

MODERATOR: All right. I think --

QUESTION: (Inaudible.)

ASSISTANT SECRETARY BLAKE: Oh sorry, FTA. I told you, you can't ask me more than question at once, I can't remember.

We're not currently now working on a Free Trade Agreement with India. As I said earlier, our efforts are focused first on trying to conclude a Bilateral Investment Treaty. We have had a model Bilateral Investment Treaty approved earlier this year, so that then gave us the opportunity to again re-launch negotiations on the bit with India, and we've had some good early rounds of discussions and, again, we hope to advance those as rapidly as possible.

MODERATOR: Sir, I know your time is running short. Do we have time for one more question?

ASSISTANT SECRETARY BLAKE: Sure, sure - or a couple more.

QUESTION: I just wanted to come back to the $1 billion question and the visas.

ASSISTANT SECRETARY BLAKE: Sure.

QUESTION: What is the legal justification you mentioned for extracting a billion dollars annually from people who are ostensibly guest workers in terms of social security payments? And what is the moral justification for not returning the money? You say that there is an ongoing dialogue, but the minister actually distinctly said that the U.S. refuses to even talk about this. And this is $1 billion annually from a country that's not very --

ASSISTANT SECRETARY BLAKE: Well, again, I don't want to make it sound like we are discriminating against Indians. I mean, these are taxes that are taken out of every single worker in the United States, and that's - when you come to the United States, that's one of the things that you agree to do, is that --

QUESTION: (Inaudible.)

ASSISTANT SECRETARY BLAKE: Well, any worker. That's just part of our system to make sure that taxes and social security and other - are automatically deducted from your paycheck. And so I don't want to - your question implies that we're somehow discriminating against Indians. Everybody is subject is to this --

QUESTION: Because - there are totalization agreements with countries like Belgium where the money's returned. So why not with India?

ASSISTANT SECRETARY BLAKE: Right. But that's - see, again, there's an imbalance in our system between - in between what -- your system is configured completely differently from our own. If you want, I could have a chat with you offline, because it's - it gets into very technical, complicated details. But essentially, for the moment, we're not in a position to be able to enter into a totalization agreement with India, and we've explained the reasons why we can't do that. But we understand very well their concerns.

MODERATOR: So maybe one final question.

QUESTION: I have two questions. On the sidelines of the SCO meeting, the Chinese vice premier apparently pulled aside Minister Krishna and whispered in his ear that the "real relationship," quote/unquote, is between China and India. And this was with an eye to sort of criticizing the growing U.S.-India relationship. So I was wondering if you'd like to comment on that.

ASSISTANT SECRETARY BLAKE: I don't have anything to say beyond what I've already said on that. So what else?

QUESTION: Okay. The second question is on Iran oil sanctions.

ASSISTANT SECRETARY BLAKE: Sure.

QUESTION: Are we done with this, or is this going to be a recurring demand that we - India keep cutting oil imports, because this is causing unnecessary friction?

ASSISTANT SECRETARY BLAKE: No, no. We're certainly not done. And again, this is something that we're asking of all of our partners around the world. This is not something that's focused on India. But the current exceptions that have been granted apply for a period of 180 days - so for a period of six months.

So we're asking all of our friends and all countries around the world to continue to reduce their imports of oil from Iran and to discontinue transactions with the Central Bank of Iran and that there needs to be continued progress on that. So we hope we'll see that. And again, I think that as many others have said, these sanctions have had a real impact, and they've helped to bring Iran to the negotiating table. And so - and have again helped to dramatically reduce Iranian oil exports from I think a high of 2.5 million barrels to down to a range of 1.2 to 1.8 million barrels a day. So that's quite significant and it's, again, it's just important to keep the pressure on Iran so that they will come and negotiate with in good faith with the P-5+1 and with - and to continue, again, to work very closely with the IAEA and allow the IAEA access to all relevant facilities inside Iran.

MODERATOR: Sir, thank you very much for coming to the Foreign Press Center. This event is now concluded. Thank you all for coming.

ASSISTANT SECRETARY BLAKE: Thank you all. It was great to see you all. Thanks a lot.

(Distributed by the Bureau of International Information Programs, U.S. Department of State.)