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EU won’t push India on FTA

Financial Express, India

EU won’t push India on FTA

By Indronil Roychowdhury

3 March 2008

Brussels, March 3. The European Commission will not rush the talks with Delhi for a free-trade agreement even though India’s proposed FTA with Japan could happen sooner and affect the European Union member-countries’ presence in the Indian market.

Annette Grunberg, the European Commission’s director general of trade, said India’s FTA with Japan could “erode” the protection that the EU’s exports to India get at present and the EC would like to have the Indo-EU FTA signed before India’s negotiation with Japan is concluded.

But, she said, there are many sensitive issues at stake and the EC would not like to rush the negotiations and complete them by December 2008 as sought by India.

Peter Power, the EC’s trade spokesman, echoing Grunberg, said: “2008 is not our deadline for concluding negotiations with India.”

They said the EU and India need to have a better understanding of each other’s position on matters relating to services, intellectual property rights and public procurement, and therefore should not be in a hurry.

India’s commerce minister, Kamal Nath, recently expressed dis-satisfaction over the slow pace of FTA negotiations with the EC and said that India wants to conclude negotiations within 2008 so that the FTA is in place by 2009.

Grunberg said the last two negotiating rounds in New Delhi and Brussels had covered all issues relating to goods, services, IPR, public procurement, sanitary & phytosanitary norms and others.

“Although goods (agricultural and non-agricultural) have never been a problem area, services, IPR and government procurement are not the areas for hurried negotiations,” Grunberg said. The next round of negotiations is slated for April.

Grunberg said EU wants liberalisation of 90% of goods and is even eager to go as close to 100%. But there would be a negative list, which both sides are yet to propose.

While India wants a better access for its services, the EU wants better access for goods. “The EU’s competence to negotiate on service investment is limited,” Grunberg said.

Power said the EU’s agriculture is by no means a stumbling block for the FTA as EU is not into exporting bulk agricultural commodities like rice and wheat that are linked to the livelihood of millions of Indian farmers. The EU exports only value-added agri products.

Sources close to trade commissioner Peter Mandelson said that with the Doha development round of negotiations under the World Trade Organisation getting a boost again, the EU wants to wait and see what India offers in terms of market access. It would like to take India’s offer at the WTO table as the baseline of its negotiations.

Grunberg said currently India’s applied tariff for all goods are an average of 18.3% compared with the EU’s 4.3%. EU wants that 90% of tariff line should be eliminated within the next 7 years, she said.