The Guardian | Friday 6 November 2009

EU tramples on India’s poor

David Cronin

The punishing schedules that world leaders follow don’t leave much room for reflection. So I suspect that senior EU figures visiting New Delhi today are not dwelling on the enduring relevance of Mahatma Gandhi’s teachings, even as they lay a wreath in his honour at the Raj Ghat memorial. Nor are they sifting through the abundant evidence in present-day India that proves Gandhi’s aphorism: "Poverty is the worst form of violence."

The European commission hopes that the latest annual summit can give a new impetus to talks aimed at reaching a comprehensive free trade agreement between the two sides. Three years ago India was identified as the second most important "emerging" market on the radar screen of trade officials when the commission issued Global Europe, a blueprint for enabling rich multinational companies to penetrate every corner of the globe. The first was South Korea, with which the EU clinched a trade agreement in October.

Peter Mandelson, the EU’s trade commissioner for much of this decade, continues to present India as an economic titan, telling the UK-India Business Council that he viewed the launching of free trade talks with New Delhi as one of his greatest achievements. When he arrived in Brussels in 2004, Mandelson was "struck by a sense that Europe didn’t quite get the pace of Indian change and the implications for the global economy", he said.

What Mandelson didn’t say is that hundreds of millions of Indians have been excluded from the benefits of the robust growth that left him so mesmerised. Just as he famously mistook mushy peas for guacamole, he seems to think that India comprises only a burgeoning middle class and gleaming skyscrapers. That India has one of the highest concentrations of poor people on this planet has escaped his attention. Estimates of what proportion of its billion-plus inhabitants subsist on less than a dollar a day vary from about 40% (according to the World Bank) to nearly 80% (according to a report in 2007, commissioned by the Indian government). Regardless of which source is most accurate, it’s clear that extreme hardship is widespread.

Mandelson’s successor in Brussels, Catherine Ashton, isn’t any better. She has kept the trade talks with India high on her list of priorities. She has also kept the details of the discussions secret to ensure that they will not be subject to anything as irksome as democratic scrutiny. Still, drafts of the agreement that her aides are pushing India to sign have leaked. And their contents are frightening.

An analysis by the fair trade organisation Traidcraft has exposed how the EU’s preferred agreement is driven by the flawed thinking that helped cause the financial crisis. As part of a deregulation agenda, India would be required to effectively cede control of its banking sector to the masters of global capitalism. Foreign banks are currently allowed to open only 12 new branches in India per year; the EU is pushing vigorously for that restriction to be scrapped.

Worse, the EU is demanding that India should accept standards of intellectual property that go beyond those agreed at the World Trade Organisation. Once the related provisions enter into force, India would have to tailor its evolving patent regime more to serve the profits of pharmaceutical corporations than the medical needs of its population. India’s status as a leading manufacturer of low-cost generic drugs would be imperilled if EU trade officials and their chums in the pharmaceutical industry have their way.

It is scandalous that the unsavoury consequences of the free trade agreement are receiving scant attention from the mainstream press in both Europe and Asia. Awed by free trade rhetoric, The Business Standard in India has reported that the negotiators are striving to create an "almost Lennonesque utopia", where Indian lawyers will be able to practise freely in Spain and aspiring epicures in Delhi could "enjoy a buttery glass of French wine without having to spend a month’s wage on it". The Japan Times, meanwhile, has noted that the EU is vying with Japan to first sign a free trade agreement with the Delhi government. "The race for India is on," the paper says, a conclusion that should make anyone with a knowledge of the country’s history shudder.

"The weak can never forgive," Gandhi also said. "Forgiveness is an attribute of the strong." India’s poor have every right to be incensed at how their government is being pushed into signing trade agreements that are inimical to their interests. Forgiveness for the harm inflicted on the poor probably won’t be sought; it certainly won’t be granted.