Institute of International Trade (Kolkata) | 23-Jun-2009
“India and Eu’s combined strategy for the free-trade pact worsen its position at WTO”
On 2007 India and European Union has launched free trade and investment agreement. Though Brussels and New Delhi is working on it so that it almost get prepared at the end of the year. Though the Government of India is promising to arrange the agreement between to equal halves but the GDP is enough below the EU countries which is now realizing the big trade loss. But the government is trying to curtail down 90 per cent of Indian imports from EU from seven years.
This measure will not at all improve the life of the Indians whereas it will make many people unemployed from the food processing and automobile sectors as well it will be mainly suffered by the poverty stricken people, it has been declared after a research at ample organizations in Europe. Though the farmers are not indulged in this but it will be obviously levied on them too.
India is totally running on a loss in importing the farm products whereas the exports have been increased. The agreement which is forthcoming on the Indian economy is that the European firms will be promoted in the Indian markets but the EU farmer’s interference is not at all included in it.
India is mainly a country whose base is agriculture and as well its basic source of employment is also based on it but this newly formed measure which is forthcoming will almost smash India’s position at WTO. This will also provide a country which is in its developing condition to elevate its tax but melts down when it suffers from an excess amount of price from its import. Therefore is it will be possible to appeal at the WTO to urge safeguard for the farming sector and to get the consent for starting a new agricultural farm. According to the measure of free-trade pact it appeals that India will be permissible to apply tariffs on 524 genuine products among which 156 are agricultural based. They also proposed that it is twice for India because at WTO they won’t be getting this much also and the agricultural sector will be protected as well.
It is necessary to maintain the level of tax over the genuine products but the unusual protection mechanisms is urging to raise it. Under this trade agreement which is forming with Brussels is going to curtail the advantages from WTO which it was previously use to provide a protection for imports.
Mostly affected area will be the dairy farming where regularly five million women and 15 million men work to meet their daily needs. They will survive now from a tough competition from EU’s farms where the government provides them with financial assistance of US$ 550 per tonne on skimmed milk powder then US$ 850 per tonne on full-cream milk powder last but not the least US$ 1,200 per tonne on butter as well as butter oil. The dairy items are one of the most important parts but the government here will not be able to cope up with the situations with EU’s.
This is one of the most shocking elements for the people of the country who engage themselves in this work is that from past 10 years National Dairy Development Board had formed many schemes and rules for the dairy farming which have totally closed maximum number of dairy farms in the country and the few are going to be closed very soon with the implementation of this pact.
Another controversial matter which is engaged in this is the Intellectual Property Rights. There are lots of newly formed Plants in EU for which a safeguard process is required to maintain for the crops and most importantly the patents rights from all the countries are permissible to EU. But is creating an opposition from the side of India because India’s Plant Variety Protection and Farmers’ Rights Act provides the country men the right towards its inherited raw materials together with the seeds. Finally, there will be huge loss for the agricultural sector whereas a little improvement in the technological and rich sectors.