Non-trade issues between India & EU need to be addressed under FTA

Non-trade issues between India & EU need to be addressed under FTA

New Delhi: Non-trade issues are key policy concerns and need to be addressed within the framework of the free trade agreement or FTA talks between India and the European Union, Daniele Smadja, ambassador, head of the EU delegation in India said on Friday.

While India has been insisting to keep non-trade issues such as child labour, human rights violation of the FTA radar, analysts feel EU’s constant focus on the issue could derail talks.

“Non-trade issues are important because they are policy concerns. They have to be addressed within the FTA," Smadja said.

“But we have to keep in mind we don’t create new tariff barriers. The priority is on tariff negotiations, government procurements, intellectual property rights, non-tariff barriers," she added. Smadja said child rights and human rights issues in Indian labour market are key concerns for EU.

Earlier this year, the European Parliament had said that human rights and democracy constitute an essential element of the FTA. It had raised its concern regarding the “continuing persecution of religious minorities and human rights defenders in India" and the current human rights and security situation in “Indian-administered Kashmir".

It has also called on India to sign the nuclear non-proliferation treaty, even though the Nuclear Suppliers Group has lifted its embargo on India’s nuclear trade. Earlier, speaking to Mint, a senior commerce ministry official had said that they have clearly conveyed to the EU delegation that they are not in a position to negotiate anything other than trade and investment related matters. “Sovereign issues are of our own and non-negotiable," he had said.

“We have made it very clera in various forums that we cannot negotiate such issues. Even we have reservations in negotiating governemnt procurements and we have said that TRIPS related issues are of serious concern to us. EU is raising non-trade issues to put more pressure on India to get what they want in other areas. This could derail the talks," said Biswajit Dhar, Biswajit Dhar, Director General, Research and Information System on Developing Countries.

Talks for an India-EU FTA started in 2007 and the seven round of negotiations was held in New Delhi last month. The issue will be taken up at the India-EU summit on 6 November in Delhi where the dates for the next round of discussions will also be finalised, Smadja said.

“India-EU FTA is a strategic objective for us. The negotiators are getting into the details now. There are number of aspects that are not easy. These will be taken up at the India-EU summit," Marco Buti, director general for economic and financial affairs at EU said.

Asked if there is a timeline by which both the sides want to conclude the talks for the free trade agreement, Smadja said “Substance is more important than timing. We have to maintain the objective for a very comprehensive which is highly beneficial to both sides. This is a very difficult FTA because it is an ambitious one. We know there is no quickfix. However, we have made good progress."

“We have the most difficult path ahead. We have difficult constituencies to satisfy on both sides," she said.

The EU is India’s largest source of foreign direct investment (FDI), accounting for €10.9 billion (Rs70,959 crore now), or 65% of all FDI inflows in India in 2007. India was EU’s ninth-most important trading partner in 2007.