Services at forefront as India, EU plan Ceca
Financial Express, India
Services at forefront as India, EU plan Ceca
Economy Bureau
7 October 2006
NEW DELHI, OCT 6: National treatment, mutual recognition of professional qualification and competition policy would initially be in focus, as India and Europe are set to commence talks for a comprehensive economic cooperation agreement (Ceca), government sources told FE.
National treatment is extending the treatment that is being given to national companies to foreign companies too. It is a safeguard against negative discrimination for foreign companies. India is proactive about getting the national treatment for its companies in EU in the wake of several Indian companies taking over the EU companies, sources said.
An India-EU Ceca has the potential to dramatically change the pattern of India’s foreign trade, with the 20-country bloc being the single largest trading partner of the country. India’s trade with the EU doubled in the last five years, even as EU’s share in India’s foreign trade decreased by 5% in the same period.
The proposal for India-EU trade and economic pact was recently taken up by European Parliament President Josep Borrell with commerce and industries minister Kamal Nath.
Nath said Indian investment in European companies instead created a synergy by making European companies more competitive. For instance, the landing gear and doors of Airbus planes are being made in Bangalore adding to the competitiveness of Airbus.
However, the EU is expected to argue strongly in favour of a stringent competition policy to counter the possibility of Indian companies having a monopoly in certain sectors and also for creating a level-playing field for their companies.
The talks on mutual recognition agreement for professionals will be on the lines of such an agreement with Singapore. Official sources, however, said it would take 3-4 years to sign a Free Trade Agreement (FTA) between the two countries. The FTA would also comprise a dispute settlement mechanism.
“The EU is a high level cost economy, while India is a labour abundant economy. There are obvious complementarities and to exploit them, it would be useful to ink an FTA which is comprehensive enough to cover trade in goods, services and investment.
However, India is perceived to have an advantage in services. And therefore, we need to do our best to get the trade barriers removed, like signing a mutual recognition pact on professional qualifications,” RIS Director General Nagesh Kumar said.
