Business Standard | September 11, 2009

BS Reporter / Mumbai

Ahead of the next round of talks on a bilateral trade treaty with India, the European Union (EU) today said it was keen that the comprehensive pact included government procurement agreement.

While India has so far resisted any move to include procurement on the agenda, Daniele Smadja, the EU ambassador to India, told reporters that the 26-member trading bloc was keen that the agreement open up the market in India and also help Indian companies access the European procurement market which was estimated at over 2 trillion euros (around Rs 1,41,29,087 crore).

In addition, she said that India had agreed to include competition policy on the agenda.

In the past, EU has pushed for the inclusion of government procurement and competition policy in the agenda for the Doha Round of trade talks but had to bow down to pressure from developing countries, including India. Finally, six years ago at the Cancun meeting of trade ministers from the World Trade Organization members countries the items, which were part of the so-called Singapore issues, were dropped from the agenda.

The EU has, however, been pushing for inclusion of these issues in the bilateral trade agreements that it is negotiating.

Apart from competition, India has also agreed to negotiate an investment treaty, intellectual property rights, tariffs on goods and liberalisation of trade in services, Smadja said.

Though a tentative deadline of end-2009 had been fixed for completing negotiations, given the large mandate for the negotiators, and the elections in India and EU, the first half of 2010 is the new target, Smadja said. So far, the negotiators have completed seven rounds of negotiations and the next round is scheduled in Delhi in October but the progress has been limited to exchange of list of items where tariffs could on which tariff could be cut. Smadja said the target was to see tariff reduction in 90 per cent of the items. Though the European ambassador refrained from disclosing details, she flagged cars as one product category where EU was seeking a steep tariff cut.

In case of services, EU is keen that India open up the financial services, telecom, retail, postal and professional services. In return, however, it was unwilling to offer more visas for Indian professionals, which could prove to be a stumbling block.

Similarly, in case of investment, India is not keen on granting pre-establishment national treatment which would accord the same treatment to European companies as is given to their Indian counterparts.