President Obama on Sunday signed H.R. 847, the James Zadroga 9/11 Health and Compensation Act, into law. (CNN report) Next up is a trade dispute with India, the result of last-minute changes by the U.S. Senate to the legislation’s funding mechanisms. From The Calcutta Telegraph, “US 9/11 treatment tax upsets India“:
New Delhi, Jan. 2: New Delhi may take Washington to the World Trade Organisation’s dispute panel over its move to fund a free-treatment scheme for 9/11 victims through legislation that will cost Indian IT companies millions of dollars, officials said.
Washington plans to raise the money in two ways. One, by imposing a two per cent levy on goods and services it imports from certain developing countries that include India. Two, by extending a fee hike for certain categories of the H1B and L1 visas that are extensively used by Indian professionals working in America.
These new laws will mainly hurt India’s IT companies, which earn about 60 per cent of the country’s $50 billion revenues from exports to America. The visa fee hike alone is expected to cost Indian IT companies operating in the US an extra $200 million a year.
“We plan to seek consultation with Washington at the WTO (an international body dealing with the rules of trade between nations) to discuss the legislation,” an Indian commerce ministry official said. “We would not hesitate to take the matter to the dispute settlement panel of the trade body if the issue does not get resolved.”
In an earlier letter to U.S. Trade Representative Ron Kirk, India’s minister for commerce and industry, Anand Sharma, wrote: “Passing of such a legislation would to my mind be a retrograde step for greater trade engagement.”
The Telegraph also reported:
Som Mittal, president of the National Association of Software and Services Companies, said US lawmakers seem to have developed a practice of unfairly taxing foreign companies to pay for domestic issues.
“The bill is a violation in spirit of the joint communiqué signed by President Obama and Prime Minister Manmohan Singh,” he said.
These are the kinds of issues that Congress would normally address through committee hearings, but not so in this case. Jon Stewart must have been shouting so loudly that no one could hear the chairman’s gavel.
We’ve been covering the legal and political aspects of the compensation legislation at Point of Law. As for the India trade angle:
- Economic Times, “Indian IT to pay for US 9/11 victims under James Zadroga Health & Compensation Act“
- Economic Times, “India may drag US to WTO over H-1B, L-1 visa fee hike“
- Daily News & Analysis, “Software companies cry foul as US Senate passes 9/11 taxes bill“
- India Today, “US snubs India on visa fee hike issue“