New Delhi: India has told France, a member of the European Union (EU), that there is no further scope for meeting the grouping’s demands on a proposed free-trade agreement, according to a background note reviewed by Mint, indicating a hardening of the government’s stance on the issue.
The message was passed on by trade minister Anand Sharma, who is currently visiting the country, to his French counterpart, according to this background note. EU needs to quickly decide on the proposed agreement as there is a limited window of opportunity available, according to this note.
Negotiations for a Bilateral Trade and Investment Agreement (BTIA) between India and EU, which started in June 2007, have missed several deadlines. Both sides have already held 15 rounds of talks with the last one on 4-6 December 2012. A meeting between Sharma and EU trade commissioner Karel De Gucht in Brussels in April also had failed to resolve differences.
A trade expert who spoke on condition of anonymity said an element of frustration was creeping in since the negotiations have dragged on for so long and the economic situation in India, which is struggling to boost slowing economic growth, and the EU, battling a debt crisis and recession, has changed dramatically.
“Given the worsening current account deficit situation, it will be impossible for the government to accept anything which shows no gain,” the expert said. “On the other hand, India also apprehends that the European Parliament may throw the negotiation back to it, asking it to include labour and environmental issues, which are not acceptable to it. India seems to have pre-empted this.”
Holding that the negotiations remained poised at a delicate juncture, Sharma sought political support from France to complete the negotiations.
“India has offered an extremely robust package to Europe. It would be difficult to compromise on issues of policy formulation, which are the prerogative of a sovereign nation,” Sharma said, according to the note.
The background note further said there was enough on the table from the Indian side in all the areas of EU’s interest and that it is now necessary that ambitions are tempered to ensure early closure of negotiations. “Both sides can follow a sequential approach in further negotiations so that the treaty can be further deepened/ broadened,” it added.
India is moving to liberalize policy on retail, banking and insurance, and would prefer EU to address its concerns by taking similar action.
“From our side, we need declaration of Data Adequacy Status from EU to enable EU commitments in cross-border supply to be commercially meaningful to us,” the note said. Data Adequacy Status is a big demand of India as its current lack of status has prevented the flow of sensitive information to India, a big deal for its IT industry.
“We are also concerned with the proposed Safeguard Clause for Mode 4 commitments for contractual Services Supplies & Independent Professionals as this will greatly reduce potential benefits,” it added. India is seeking a higher level of trade liberalization from EU for its skilled professionals under so-called Mode 4 rule for trade in services under the World Trade Organization.
In his meeting with Gucht, Sharma highlighted issues of market access for agricultural products, pharmaceuticals and textiles, maintaining that India cannot go beyond the parameters of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement and Indian laws on intellectual property in the ongoing negotiations. The EU, on its part, had sought assurances on the facilitation of the registration of Geographical Indicators.
Various groups have built up pressure against a trade deal that they regard as likely to be discriminatory. These include industry lobby groups such as the Society of Indian Automobile Manufacturers, the Gujarat Cooperative Milk Marketing Federation Ltd, which runs dairy products producer Amul, and healthcare activists.
In a rare intervention, the Parliamentary standing committee on commerce headed by Bharatiya Janata Party leader Shanta Kumar in April warned the government against signing an accord that hasn’t been examined by its members.