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India calls EU trade bluff

The Times of India | 13 Oct 2006

India calls EU trade bluff

Rajeev Deshpande

HELSINKI: Adopting a ’take-it-or-leave-it’ posture, India on Thursday turned down last-minute EU efforts to dilute a trade and investment agreement by introducing onerous non-tariff conditionalities.

Playing hardball, commerce minister Kamal Nath told EU trade commissioner Peter Mandelson that India was not prepared to offer any further concessions in its trading positions.

There are indications that the tough talk may pay off and EU may blink while finalising the framework for the trade agreement to be announced on Friday.

Nath spent considerable time with Mandelson to iron out matters, before delivering India’s final position. There is a sense of surprise in the Indian camp as it was only in September that Mandelson had presented a report to the EU strongly recommending an FTA with India and noting New Delhi’s willingness to sign up to the proposal.

PM Manmohan Singh will be meeting Finnish PM Matti Vanhanen, European Commission president Jose Manuel Barroso, foreign policy chief Javier Solana and Mandelson.

Though the talks have been under way for several months, only last week EU decided to change the course of the dialogue by seeking inclusion of issues like labour, environment and non-proliferation, which India is unwilling to accept.

EU had earlier made a pitch for including these issues in the WTO, but a steadfast opposition by India in Doha in 2001 meant that they were not brought back to the agenda. Agreeing to these demands would put pressure on New Delhi to agree to a multilateral framework on the issues.

Sources in the Indian delegation said that the ball was now in the EU court and it was up to the grouping to come up with a response. There was a feeling that given the high stakes involved, with the Indian PM in Helsinki, the EU would approach an accommodation with India.

The framework, a roadmap to an FTA, will be time-bound and is seen as a confidence pill for India-EU trade. The principal benefits for India are that EU investment will flow more willingly while there will be higher access
for Indian professionals in Europe.

India’s booming BPO sector will be safer from political attacks in EU while also attracting even greater investment.

 source: Times of India