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Economic growth without social justice: EU-India trade negotiations and their implications for social development and gender justice

Economic growth without social justice: EU-India trade negotiations and
their implications for social development and gender justice.

Author: Christa Wichterich, with input by Yamini Mishra, CBGA, New Delhi,
and Pam Rajput, University of Chandigarh.

On 28 June 2007 negotiations on a bilateral trade and investment agreement
between India and the EU were launched in Brussels. The negotiations have to
be seen have to be seen in the context of fast-changing global economic
relations and the growing significance of the emerging markets in Asia. Both
sides consider an export-led and free-trade-oriented strategy a powerful
driver of economic growth, development, and employment. India is in the
process of adopting in a “grand leap forward” the liberalisation model,
enhancing its export industries in manufacturing and information
technologies, and its access to foreign markets. It has already become an
important production base and outsourcing destination for EU operators. The
EU wants to maintain its competitiveness in the world economy by gaining
access to the large Indian market, expanding investment, the export of goods
and services, and ensuring favourable trade rules and regulations.

While the bilateral free trade agreement (FTA) is supposed to prepare the
ground for a “strategic partnership” in trade and investment, India is still
a major recipient of EU development aid. The Country Strategy Paper for
India 2007-2013 provides 470 million euro for both economic and development
co-operation. While in the past decade Indian economic growth rates rank
second in the world behind China, UNDP ranked India’s human development at
126, and gender-related development at 96 in its global comparison. One
quarter of the population of India lives below the poverty line.

This paper attempts to place the EU-India FTA negotiations in their
historical and topical context, and questions the coherence between the
development aid agenda on the one hand, and the trade and investment agenda
on the other. Does it still hold true what the European Commission stated in
1996 aiming at enhancing the EU-India partnership: “The European Union
firmly believes that social development must be a parallel objective to
economic development”? Exploring the main interests behind the FTA on both
sides, the paper asks whether considerations regarding social inclusion,
poverty eradication, and gender equality are informing trade policy-making.
It looks at trade liberalisation and the FTA procedures through the prism of
social justice and human development. Since bilateral trade negotiations are
held in great secrecy, the paper wishes to provide civil society actors in
the EU and India with background information and to build their capacity to
engage critically in policy-making on trade and development and in
transregional networking.

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