EU, India Renew Push to Finalise Trade Talks

23 November 2011

The EU and India are hoping to clinch a free trade deal within the coming months, according to top-level officials from both sides. The February 2012 EU-India Summit has now been set as the new deadline for completing the talks, which were launched in 2007.

The renewed push to complete the trade talks was announced late last week by both EU and Indian officials. John Clancy, the EU Trade Spokesman, said in a 17 November statement that discussions are currently moving at "full steam ahead."

"Intense negotiations will therefore continue over the coming months to effectively solve the remaining core issues between now and the EU-India Summit," he added.

A statement from the office of India's Commerce and Industry Minister, Anand Sharma, also confirmed the "satisfaction with the progress of negotiations" of the EU-India trade pact.

Since negotiations were launched in 2007, the talks have faced repeated setbacks; the pact was originally scheduled to be completed in 2010. Thirteen rounds of trade talks have already taken place.

The recent deadline for next February came about as frustrations among EU member governments, such as Britain (see Bridges Weekly, 24 February 2010), built over the various delays.

With the pact set to slash duties on over 90 percent of bilateral trade, along with an opening of mutual markets for investment and services, the EU Trade Commission estimates that, in the short run alone, India would gain €5 billion and the EU over €4 billion from finalising the pact.

However, struggles with outlining provisions for access to medicines, movement of labour, and tariff reductions have been major roadblocks.

Despite the renewed commitment, Germany's Head of Foreign Trade Division, Berend Diekmann, cautioned that "India and the EU are far away from each other as far as the negotiations are concerned," according to AFP.

Talks on a range of remaining issues are expected to take place during the upcoming month. Expert-level negotiations on non-tariff barriers took place on Monday; chief negotiators will meet during the week of 5 December to discuss outstanding issues, with additional discussions between senior officials scheduled for mid-December.

Tough issues still remain

Intellectual property (IP) rights, specifically regarding pharmaceuticals, have been a consistently tough subject for the two parties since the talks began (see Bridges Weekly, 22 December 2010).

India supplies over 90 percent of AIDS medicine currently used in developing countries. Public health advocates, such as Médecins Sans Frontières (MSF), have long expressed fears that the trade agreement could include intellectual property provisions that go beyond those in the WTO's Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, hindering access to medicines (see Bridges Weekly, 24 March 2010).

If data exclusivity clauses are included in the trade pact, protecting data produced by drug companies concerning clinical trials, efficacy and safety of medicines, critics fear that India's generic pharmaceutical industry could suffer a loss in competitiveness. This, in turn, could make it difficult for developing country consumers to access affordable, high-quality generics.

Indian tariffs on wine and automobiles are another ongoing area of disagreement, Diekmann noted. The German negotiator explained that India had agreed to lower tariffs from 60 percent to 30 percent on high-end automobiles, bringing that down further to 20 percent after five years; small cars would see tariffs cut to 40 percent over five years. However, EU negotiators had wanted greater cuts, Diekmann told reporters.

ICTSD reporting; "EU, India to work ‘full steam' on free trade pact," AFP, 20 November 2011; "India-EU free trade talks resume today," BUSINESS STANDARD, 12 September 2011; "Trade winds: India-EU FTA may face a delay," HINDUSTAN TIMES, 16 November, 2011.

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