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Differences over negative list hold up India-EU trade pact

Eocnomic Times | 7 Feb 2008

Differences over negative list hold up India-EU trade pact

Amiti Sen & G Ganapathy Subramaniam, TNN

NEW DELHI: India Inc’s eager wait for a comprehensive trade and investment agreement with the European Union could get a little longer as differences have cropped up over the items which would be kept off the pact.

India is yet to submit its list of items which it wants to retain in the negative list. The EU negative list includes items which will not get customs duty concessions under the free trade agreement (FTA) which will be part of the economic pact. The EU, on its part, has come up with a list of 226 products, mostly chemicals, petrochemicals, plastics, ceramic and glassware items. Several sections of the Indian industry feel they would be denied concessional market access under the FTA if the EU negative list is not pruned.

At the same time, there is a clamour for more items on India’s negative list and even sectors that are not vulnerable to competition from EU countries want to play it safe. This has led to delay in finalisation of India’s negative list. The differences of opinion over the two negative lists may lead to delays, officials said. EU’s negative list was handed over to India in December, but the response has not been finalised so far.

In the case of India’s negative list, officials have appealed to the Indian industry to restrict their demands to the minimum. If differences over negative list of goods are not resolved, the larger objective of opening up trade in services would suffer a setback. India would benefit in a big way if the EU o pens its doors for Indian professionals. The commerce department has circulated EU’s list to the relevant ministries and departments so that the items of export interest could be identified. This would enable early launch of negotiations with the EU for removal of items of Indian industry’s interest from the list.

Commerce department officials told ET that while the exact size of the negative list had not yet been decided, there was scope for deletion of certain items.

Officials added that the commerce department had not yet been able to finalise its own negative list as it was finding it difficult to drop products from a tentative list which it had prepared because of opposition from the affected sectors.

India and the EU agreed to include at least 90% of traded products in the bilateral agreement. This means, India will be allowed to exclude not more than 10% (450 products) of tariff lines from formula cuts. “We are working on the negative list and hopefully we will be able to finalise it soon,” an official said.

EU’s suggested negative list has been circulated to the departments of chemicals & petrochemicals, fertilisers, health and Ayush (ayurveda, yoga & naturopathy, unani, siddha & homeopathy). Views have also been sought from the export promotion councils of chemicals & allied products, basic chemicals, pharmaceuticals & cosmetics and plastics.

The commerce department has said that while identifying the items which need to be removed from EU’s negative list, the detailed justification for its removal should also be sent so that it could be indicated to the EU.

 source: Economic Times