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FTA with EU stuck on non-trade barriers

Economic Times, India

FTA with EU stuck on non-trade barriers

27 April 2010

By Nirmala Ganapathy, ET Bureau

NEW DELHI : Apart from trade issues, the free-trade agreement (FTA) negotiations between India and the European Union (EU) continue to be stuck over non-trade issues like human rights, child labour and environment.

Ahead of the beginning of a new round of trade talks, EU parliamentarians, who are on a trip to India to step up the engagement between India and the EU, maintained that non-trade issues remain a critical part of the India-EU free-trade negotiations.

The statement by EU parliamentarians comes as Indian negotiators left on Monday night for Brussels for the ninth round of negotiations

on the free-trade agreement. Sources said all issues, including rules of origin, trade in goods and services, would be discussed in the new round of negotiations. Also, there is hope that the new round of talks will yield some forward movement.

Even though the European Union negotiators’ priority remains trade issues, non-trade matters have also acquired importance in view of the focus from the European Parliament. “The issues of human rights and social rights...environmental issues are very important for the European Parliament,” said Lena Kolarska-Bobinska, vice-chairwoman, delegation for relations with India. She added these are not issues on which EU was ready to compromise.

“These are not issues which we can leave aside. This is important for parliamentarians,” she added.

A senior official in New Delhi pointed out that Europe remains one of India’s biggest trading partners, investment is growing and there is interest in having a strategic cooperation with EU, but the attempt to bring in non-trade issues into free trade remains a spoiler.

India has already expressed opposition in earlier negotiations to non-trade issues being attached to an FTA negotiations and has said there are other forums for addressing these issues. It is also seen as an attempt to bring in labour and environment issues through the backdoor.

Despite differences, there is a keen desire on both sides to see the conclusion of the free-trade agreement and deepen EU-India economic engagement. “We would like to achieve it (free-trade agreement) this year,” said Graham Watson, chair of the eight-member delegation. “The Indian side has its red lines and we have our red lines,” he said, but added there is a mutual interest and recognition that the free-trade agreement was the way forward.

Commerce Minister Anand Sharma had expressed hope that the India-EU free-trade agreement would be signed later this year. However, there is also a clear bid to deepen strategic ties between the two sides and look at strengthening cooperation in areas like counter-terrorism and security. The delegation is expected to hold a dialogue on these two issues, among other, in their interaction with the Indian political leadership.