These are trying times for US President Barack Obama. Six months into office, he is bravely confronting the challenges he had inherited - recession with a financial meltdown, fiscal deficits and two wars. Yet he is simultaneously attempting sweeping reforms to reshape the American economic, besides his dramatic moves on the world stage to re-position the United States as a benevolent global power. He neither under-estimates the enormity of the challenges facing him nor would he give up any of his domestic priorities, like health and energy.

He has re-connected with Europe - the 'Atlantic Allies' - and is re-setting relations with Russia for advancing weapon reductions and addressing global issues together. His administration is re-establishing strategic dialogues with China and India. He is adhering to the timetable of troop withdrawal from Iraq before the end of 2011 while USA steps up the fight against the Taliban and Al Qaeda terrorists in Afghanistan and those entrenched on the Pak-Afghan border.

True, success has eluded him so far at home, especially in what he had set out to accomplish quite early in office, such as landmark reforms in healthcare designed to cut soaring costs for families and businesses and cleaner energy to lead the world in combating global warming. Democrats controlling the Congress differ in details on scope and financing health system reform, failing to keep to his August deadline. Rejecting President Obama's repeated overtures for bipartisanship, Republicans are out to scuttle his high priorities, all of which they view as a Federal over-reach.

Undaunted, President Obama is confident of signing healthcare reform legislation before the end of the year. The energy legislation sent to the Senate from House reflects the President's desire to facilitate a global accord on climate change at the UN Conference in Copenhagen in December. There is still hard negotiation ahead for all major economies on issues of mitigation and adaptation to climate change, on which emerging economies have opposed numerical targets on reduction in carbon emissions. Developed country commitments have thus far fallen short of expectations, especially by USA, given their historic responsibility for global warming.

Continuing job losses despite the massive stimulus package (787 billion dollars) enacted in February and failure to get the Congress act faster on his reforms have eroded somewhat the President's rating though he enjoys overall confidence.

Climate Change

The Declaration on Climate Change by the Major Economies' Forum (16 developed and developing countries) agreed that the global average temperature above pre-industrial levels ought not to exceed 2 deg.c. Developed nations would identify global goals for substantially reducing emissions by 2050 between now and Copenhagen (Dec). Reaffirming the objectives and principles of UN Framework on Climate Change Convention, the leaders acknowledged that their vision for future cooperation should be consistent with "equity and our common but differentiated responsibilities and respective capabilities.”
Unlike EU which has a relatively ambitious target, the US legislation now before Congress proposes a 17 per cent cut in emission levels of 2005 by 2020 and 80 per cent by 2050. The legislation has also a trade restraining clause for countries not joining mandatory cuts. The major issues in climate change are the lack of deeper commitments by USA both long-term as well as mid-term targets for developed nations while developing countries await rich country commitments on technology transfer and funds for adaptation.

President Obama said after the G-8 Summit that agreement by developed nations to reduce emissions by 80 per cent was a 'historic consensus', he said and "we will undertake with all (developed) nations to cut global emissions by half." He expected developing countries to take action meaningfully to lower their emissions relative to 'business as usual,' in the next decade or so. Reflecting the President's objective, the G-8 statement said universalisation of non-proliferation remained an urgent priority. The G-8 leaders called upon all states not parties to NPT or chemical weapons convention to accede to them. Of concern to India in the context of Indo-US civil nuclear cooperation agreement was a reference by G-8 to NSG strengthening controls on transfer of enrichment and reprocessing technology.

Transforming Indo-US relations

With the Bush-Manmohan Singh bonhomie going into history, India has been cautiously looking at the Obama agenda. With its focus on non-proliferation and climate change, apart from its Pak-Afghan strategy to counter terrorism propping up Pakistan with massive aid. President Obama and Prime Minister Manmohan Singh, however, have established instant rapport. Yet, there are underlying tensions in the way issues spring up, and the visit of Ms. Hillary Clinton, enjoying celebrity status, to India, her first as Secretary of State, has helped to clarify and build on pre-existing relationship with new initiatives. Notably, Prime Minister Manmohan Singh will be the first dignitary invited by President Obama on a state visit in November.

The Clinton visit was not without some jarring notes for her from the assertive tone of the Minister of State Jairam Ramesh who reminded Hillary Clinton where India stood in relation to climate change. Hillary might have been surprised that differences were aired on a public forum in her first public engagement in the capital before her meetings with external affairs minister S M Krishna and the prime minister.

Ramesh said India could not be 'pressured' on emission reduction, for a country with per capita emissions well below that of developed nations, and then cited the "threat of a carbon tax on our exports." Hillary assured USA had no intention of forcing India to stall or undermine economic growth necessary for her millions to emerge out of poverty. She nevertheless talked of each country having to deal with the challenge of climate change though what each country would do would very likely differ. That was to be worked out in the months leading upto Copenhagen.

Whatever issues remain to be sorted out, the joint statement issued after the meeting of Clinton with external affairs minister S M Krishna unveiled "an enhanced Indo-US strategic partnership" to address solutions to the defining challenges of 21st century. The key components in this 'transformative phase' of the relationship include an Indo-US Strategic Dialogue chaired by the two ministers, increased coordination in addressing common security interests, an agreement on end-use monitoring of US defence items, progress at UN Conference on Disarmament toward a non-discriminatory and internationally verifiable Fissile Material Cut-off Treaty and consultations on reprocessing arrangements and procedures as provided for in the Civil Nuclear Cooperation Agreement.

The two leaders also agreed on taking forward the multilateral trade negotiations to conclude the Doha Round. India has offered two sites for developing nuclear power by American companies. While the Secretary of State has claimed, not without justification, that her visit helped to register 'strong (US) presence' in India and South East Asia, the agreement on end-use monitoring of defence items by USA and the G-8 decision to bar enrichment and reprocessing technology to countries not signatory to NPT drew fire from the opposition in Parliament led by BJP and Left.