EU-India free trade deal in final lap, diplomat says

Dinkar Barroso.jpg

A free-trade agreement between India and the European Union has entered its final stage and negotiators "are looking at a possible conclusion" by spring, the Indian ambassador to the EU told EURACTIV.

“This has been a long journey for the negotiations, which is inevitable, given the size of the two partners and the importance of the domestic economies on both sides,” Ambassador Dinkar Khullar said.

The diplomat added that the deal will be a broad-based trade and investment agreement, which will cover over 95% of tariff lines.

India and the EU have been negotiating a bilateral free trade and investment agreement (BTIA) since June 2007 and have missed several deadlines to conclude the talks, due to unresolved issues related to market access.

“Inevitably, there are last-minute hitches because individual sectors are of importance to both countries,” Dinkar Khullar said, stressing that the next couple of months will be critical, but he expected an outcome at the next EU-India summit, which is expected to take place this spring.

“The negotiators have been advised to work towards trying to present to the leaders at that time some kind of conclusion,” he said. “Whether they are able to do so will depend both on the negotiators and the political will. So far as we can see both sides’ leaderships have demonstrated political will to go in for this agreement.”

The EU is India’s largest trading partner, accounting for approximately €86 billion in trade in goods and services in 2010. Bilateral trade in goods alone rose 20% from 2010 to 2011, with exports amounting to €33.4 billion and imports to €33.3 billion, with Germany, Belgium and Britain accounting for around 60% of exports to India.

On the other hand, India accounts for 2.6% of the EU’s total exports and 2.2% of the EU’s total imports, indicating huge potential.

Reports underscore that trade is likely to more than double to exceed to €155 billion by 2015 if the trade pact is implemented.

“In five years of negotiations, I think they have come to know what the issues are. There are some intractable issues, completely impossible issues on both sides, which they have left out long ago from the negotiation table,” the ambassador said, arguing that some issues will remain unresolved, but there these cannot stop a deal.

Not only trade

The future of EU-India relations will now point more to the political agenda, said the Ambassador, highlighting the increasing number of dialogues taking place between the two partners.

“I think the expansion is now going to be on the non-economic side of our agenda,” he said, mentioning counter-terrrorism, piracy and cybersecurity, which he called a ‘new and emerging threat.’

“I believe the EU is the only group of nations with whom we have a dialogue on cybersecurity. It has been going on for the last two years,” he noted.

On global governance and the need for India to play a bigger role in international affairs, the ambassador pointed to the role of the EU in the increasing number of global forums where decisions are taken.

“Europe is the great achiever of the 20th century, just in terms of how it has evolved post-1945 and what they have been able to do in terms of security within the borders of Europe. All of us would like to this kind of security worldwide,” he said, arguing for Europe to remain a balancing force in world affairs, as much as India.

Ambassador Dinkar Khullar spoke to EURACTIV Editor-in-Chief Daniela Vincenti.

EU-India relations date back to the early 1960s when diplomatic relations were established. But it was 1994's Cooperation Agreement (which is still the current legal framework for cooperation) that opened the door to the broad political dialogue that has since evolved, notably through annual summits since 2000, and regular ministerial and expert-level meetings.

In recognition of both sides' political and economic importance, the EU-India Strategic Partnership was launched in 2004 to enable the two partners to better address complex international issues in the context of globalisation.

To underpin the Strategic Partnership, leaders adopted the EU-India Joint Action Plan (JAP) at their 2005 summit. The JAP defined common objectives and proposed a wide range of supporting activities in the areas of political, economic and development cooperation.

In recent years, the establishment of a Free Trade Agreement between the two partners has gained momentum and a deal was expected in the spring of 2011, but disagreements have marred talks' progress.

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