Free trade, climate change to top India-EU summit

Free trade, climate change to top India-EU summit

New Delhi: India and the European Union (EU) will focus on pushing for a free trade pact and narrowing differences over climate change at the 10th India-EU Summit on Friday, a European diplomat said on Wednesday.

The two sides have held seven rounds of talks since 2007, and Daniele Smadja, EU’s ambassador to India, said the leaders must now “bring political momentum into the discussions". Asked to spell out a timeline for the deal, Smadja said the EU does not want to sacrifice substance for a timeline but “everybody would like to conclude the agreement next year".

Among the hurdles faced by the planned pact are intellectual property rights disputes, high Indian taxes on wines and spirits from Europe, and EU concerns over social issues such as human rights and child labour in India.

“We have the mandate from our member countries to address these issues under the framework of the FTA (free trade agreement). However, the result has to be mutually acceptable," Smadja said.

Later, when asked on these issues, commerce minister Anand Sharma said: “India is not a banana republic. We have rules and regulations in place to address these issues."

On the progress achieved so far on the trade agreement front, Smadja said, “We have to get into exchange of concessions, and these are difficult and need time."

Prime Minister Fredrik Reinfeldt of Sweden, which holds the rotating EU presidency, EU commissioner for external relations Benita Ferrero-Waldner and EU foreign policy chief Javier Solana will attend Friday’s meeting. India will be headed by Prime Minister Manmohan Singh.

Sharma will also hold talks with his EU counterpart, Catherine Ashton, regarding the seizure of Indian generic drugs consignments in European countries. India has threatened to take the EU to the World Trade Organization (WTO) on the issue. “If the issue is resolved bilaterally, it is better. Otherwise, India is ready to take all necessary action," Sharma said.

The EU will also raise the issue of high state duties on wines and spirits imported from European nations. “We are running out of time. We expect the issue to be resolved at the earliest possible. Otherwise, we may have to go to WTO. However, we need to understand that India is a federal state," Smadja said.

The EU is India’s largest trade partner with annual bilateral trade totalling around €77 billion (Rs5.34 trillion). India ranks ninth in EU’s list of major trading partners.

Climate change will also be a priority with just weeks to go before the UN climate change meet in Copenhagen in December, Smadja said.

The EU has committed to reduce its greenhouse gas emissions by 20% from 1990 levels and has said it could increase that to 30% if an agreement is reached in Copenhagen.

India is resisting any binding emission cuts and demanding finance and technology support from rich countries to help reduce emissions.