EU may appoint negotiator for bilateral trade pact with India
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Brussels: The 28-member European Union (EU) could appoint a negotiator exclusively to carry forward talks on the India-EU bilateral trade and investment agreement or BTIA, said a European Member of Parliament, who is also the chair of the almost 50-member strong India caucus.
Speaking to a group of Indian journalists in Brussels, the seat of the European Parliament, Geoffrey Van Orden also said that trade representatives from the two sides would be meeting on the sidelines of the G20 meeting in China in September which would, in turn, give a fresh momentum to the negotiations, which first started almost a decade ago.
Given the disagreements on key issues, Asia’s third largest economy and the European bloc could look at concluding a “less ambitious” pact, said Van Orden—one of the 751 sitting Members of the European Parliament or MEPs.
“I think...there is a certain validity to that,” the British MEP said when asked if there was any merit in the thinking in India that the EU pre-occupation with concluding the Transatlantic Trade and Investment Partnership (TTIP) with the US was one of the reasons for the EU-India BTIA talks slowing down.
“I think because a lot of effort is going into the TTIP and for a long time you had the same negotiators responsible for all these, we called upon the European Commission (the executive arm of the EU) to appoint a separate negotiator for the BTIA,” he said, adding that a single trade negotiator’s capacity to deal with several major Free Trade Agreements may be limited.
“I understand that that is the arrangement,” Van Orden said when asked if the EU would have a separate negotiator exclusively for the BTIA talks with India.
According to European analysts, the long-pending BTIA could act as an “anchor” for bilateral ties.
Talks on the BTIA—the official title of the free trade pact—started in 2007 but it has been marred by flip-flops and disagreements. For instance, India cancelled a meeting with the EU chief trade negotiator in August last year in protest against an import ban on 700 of its generic drugs clinically tested by GVK Biosciences for alleged manipulation of clinical trials.
The last round of talks were held in 2013 and the discussions have remained deadlocked on issues including tariffs on automobiles and wines and spirits, according to EU trade officials.
In the automobile sector, the EU is unhappy given that its exporters have to face Indian import duties of as high as 100% on cars and car parts. And in the case of wines and spirits, European exporters face tariffs as high as up to 150%.
According to EU officials, the grouping had put forward several proposals in 2013 to break the deadlock including “long transitional periods for their elimination or going as far as accepting asymmetric elimination of these duties in favour of India” in the case of automobiles.
On India’s part, disputed issues in the trade talks include the so-called Mode 4, a provision of the 1995 General Agreement on Trade in Services that seeks to facilitate the movement of professionals from one country to another.
Several rounds of stock-taking talks, including a meeting between Indian commerce secretary Rita Teaotia and the EU Trade Commissioner Cecilia Malmström in Brussels on 22 February, did not produce any results.
The impression in New Delhi seems to be that with the EU involved in talks with the US on the TTIP, the EU is not focussed on its trade talks with Asia’s third largest economy. Also occupying European mindspace is the British referendum, to be held on 23 June, on whether the country should remain in the EU.
Van Orden was critical of the single paragraph reference to the India-EU trade talks in the India-EU joint statement issued after the meeting between the president of the European Council, Donald Tusk, the president of the European Commission, Jean-Claude Juncker and Prime Minister Narendra Modi in Brussels on 30 March, the first India-EU summit in four years. But he added that there were many issues referred to in the joint statement to keep ties on the move even as the BTIA was being negotiated.
He said that “Brexit”—the term used for the possible exit of Britain from the EU, pending a referendum on 23 June—should not be a reason for the trade talks with India to slow down.
“If we can’t come to an agreement on the FTA—may be some ideas are a bit too ambitious, is there some merit in exploring something less ambitious? I think so,” said Van Orden—in seeming response to European officials who have attributed the tortuous pace of negotiations to the “high degree of ambition” in terms of outcomes.
But Van Orden made a case for concluding the pact soon, stating that India could not economically grow “as you want to if you do not enlist the support of the wider world.” Initiatives including Make in India, Skill India and Digital India—launched by Prime Minister Narendra Modi to bolster India’s economy would all be helped if the two sides conclude the BTIA soon, he said. Total bilateral trade between India and the EU, which is India’s largest trading partner, was €78 billion in 2015, according to EU figures. The EU is one of the largest foreign direct investors in India with investments of €38.5 billion since 2000.
On “Brexit” and its implications for Britain and the EU, Van Orden said “there are serious reasons why one (Britain) has to hesitate” before taking a decision to leave the EU. “If we have a seat at the table, why should we give it up?” he said.
Elizabeth Roche was in Brussels at the invitation of the Delegation of the European Union in Delhi.