Economic Times | 20 Jan 2009
FTA need of the hour: EU trade commissioner
NEW DELHI: Former European Union (EU) trade commissioner Peter Mandelson has said that efforts should be made to implement the EU-India free trade agreement (FTA) this year as it could help the two sides in overcoming challenges in a post-crisis world.
“The downturn does not reduce the value of a bilateral trade deal, it raises it. The EU and India should call the deal what it would be - a confidence-building economic stimulus package - and sign it before the end of the year,” said Mr Mandelson who is currently the British secretary of state for business, enterprise and regulatory reform.
Europe is India’s biggest market, and the top export market for its ten biggest exports. EU-India trade rose from e28 billion in 2003 to e55 billion in 2006-07, pushing the two to start negotiations on a bilateral trade agreement in 2007. The proposed agreement, called the bilateral trade & investment agreement, seeks to liberalise trade in agriculture and industrial goods, services and investment norms.
There have been three rounds of talks so far in which negotiators from both sides have been attempting to iron out differences on issues of intellectual property rights, competition, market access, transparency, rights of foreign investors, environmental, social and human rights issues.
Speaking at the 15th CII Partnership Summit 2009 on Monday, Mr Mandelson emphasised the need to keep trade flowing during the present financial crisis. The World Bank has forecast that world trade growth will go into reverse in 2009, for the first time since 1982.
Fearing that plummeting investments from the developed to the emerging economies will effect global demand that drives international trade, he asked the world to take a cue from the economic slump of 1930s, where reservation towards openness for each other’s economies had caused a global slump. “The pressure to reach for trade barriers or other forms of protectionism is stronger during a downturn - but all the more important to resist,” he said.
He noted that Europe and the UK can be a good source for India’s industrial growth and appreciated the Indian government’s commitment to liberalisation as an important step in luring foreign investors for infrastructure projects.
He also pointed out that the expansion of Indian manufacturing will be dependent on its openness to industrial imports. Mr Mandelson is heading a 20-member delegation which is looking at closer cooperation with India in nuclear technology and manufacturing.