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India, EU to talk services agreement

Economic Times (India) | 26 Sep, 2007

India, EU to talk services agreement

Amiti Sen, TNN

NEW DELHI: India will initiate discussions on liberalisation of services when the India-EU high-level trade group (HLTG) meets in New Delhi early next month to carry forward negotiations on the bilateral trade and services agreement.

The commerce & industry ministry is holding internal meetings to finetune its strategy in various areas of the services negotiations, especially for cross-border movement of professionals and other workers. The country also wants changes in the structuring of the legal text of the services agreement proposed by the EU.

India wants to put in place a fool-proof structure which will ensure that whatever is agreed to during the negotiations cannot be changed in the implementation stage.

Speaking to ET, commerce department sources said India would ensure that services was given its due attention in the week-long negotiations of the HLTG beginning on October 1. “For India, services is the most important aspect of the India-EU bilateral pact. We cannot afford to let it take a back-seat,” an official said.

India’s insistence on prioritising services is important as in several trade negotiations, talks on goods have overshadowed services. In the ongoing World Trade Organization (WTO) discussions, for instance, the focus is solely on negotiations on goods.

While the ongoing round cannot be completed without a services agreement, giving low priority to services could result in a bad deal for India. Similarly, in the India-Asean trade pact being negotiated, Asean has managed to convince India to negotiate on services only after the goods pact was in place.

The sources added that India would also ask the EU to change the structure of the proposed legal text of the services agreement. “We are not happy with the structure of the legal text. We want it changed in a way that there is no difference in representation and implementation,” the official said.

The framework agreement for the India-EU bilateral pact suggests liberalising commitments in all modes of services including cross-border movement of services, consumption of services abroad and cross-border movement of people. It also mentions facilitating the mutual recognition of professional qualifications in various sectors.

In goods, the framework suggests that duties should be eliminated on 90% of tariff lines and trade volume within seven years of the entry into force of the agreement. Modalities for the treatment of sensitive products also have to be agreed upon.

In investment, the framework proposes improved market access and provision of national treatment to investors. However, host and home states would retain their right to regulate this access.

 source: Economic Times