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Logjam in negotiations between India and EFTA on free trade deal

Hindustan Times - 16 December 2023

Logjam in negotiations between India and EFTA on free trade deal
By Rezaul H Laskar

Switzerland has expressed concerns in the latest negotiations on provisions related to mobility of Indian professionals and intellectual property rights.

Negotiations between India and the European Free Trade Association (EFTA) on a trade deal have run into a logjam because of Switzerland’s concerns on mobility and intellectual property rights and a revised Indian proposal on market access for goods, people familiar with the matter said.

The four members of EFTA – Iceland, Liechtenstein, Norway and Switzerland – have pushed for finalisation of the proposed Trade and Economic Partnership Agreement (TEPA) so that it can be signed before India begins the process for conducting a general election in 2024.

Talks on the trade deal began in January 2008 before being put on hold in 2013. Negotiations resumed in October 2016 but got a fillip this year following a concerted push by EFTA states. The 20th round of negotiations was held in-person in Geneva and by video-conference during November 20-30.

The Swiss side expressed concerns in the latest negotiations on provisions related to mobility of Indian professionals, which has become a key issue in almost all trade agreements currently being negotiated by New Delhi, and intellectual property rights (IPR), one of the people cited above said on condition of anonymity.

The issue of mobility is complicated for Switzerland as it is a member of the Schengen visa framework even though it isn’t part of the European Union. IPR constitutes a key component for many exports from EFTA member states, especially Switzerland, and this is a crucial reason for the concerns, the person said.

EFTA member states were also surprised by the revised Indian proposal for market access for certain goods, the person added without giving details. The people said these developments complicated the negotiations despite considerable progress in recent months.

Two other persons from different economic ministries said India and EFTA remain intensely engaged to expeditiously conclude TEPA. There are certain issues that need to be resolved before the deal can be signed and efforts are being made by both sides to reach common ground, they said.

Though there is no deadline for concluding the deal, both sides are looking to sign the TEPA by early next year, the people said.

Norway’s trade minister Jan Christian Vestre and Switzerland’s state secretary for economic affairs Helene Budliger Artieda made a two-day visit to New Delhi from December 12 to give a push to resolving outstanding issues, the people said. During the trip, the officials met commerce minister Piyush Goyal and finance minister Nirmala Sitharaman to discuss progress in the talks and to find common ground, they said.

“There are some outstanding issues, which is particularly because EFTA is a group of developed countries and citizens there do not face issues of subsistence like people in a developing country such as India. Hence, the approach of negotiators should be equitable, rather than that of equals,” a second person said.

“As a result of intensive talks, they do realise our sensitivities. Hence, a mutually beneficial agreement is possible,” this person added.

Both sides are also focused on a balanced trade deal, given that two-way trade is currently skewed in favour of the EFTA member states and the imbalance between the size of the two markets in terms of population. India’s total trade with EFTA states in 2021-22 was $27.23 billion, with a deficit of more than $23.7 billion.

India’s key imports from these countries are gold ($20.7 billion in 2021-22), coal, pharmaceuticals, vegetable oil, silver, dairy machinery, medical and scientific equipment. It exports chemicals, iron, steel, gold, precious stones, yarns, sports goods, glassware and bulk drugs.

The latest round of negotiations covered trade in goods and services, rules of origin, IPR, trade and sustainable development, sanitary and phytosanitary measures, technical barriers to trade, trade remedies, and customs and trade facilitations.

 source: Hindustan Times