New Delhi, Brussels Expect Autumn Trade Deal, Barroso Says

15 February 2012

India and the EU hope to finalise negotiations for a free trade pact serving 1.7 billion people by this autumn, European Commission President José Manuel Barroso said last week after a bilateral summit.

The India-EU summit, held on 10 February in New Delhi, had previously been set as the deadline for concluding the trade talks, after officials from both sides confirmed that the discussions were moving at "full steam ahead." (See Bridges Weekly, 23 November 2011)

However, reports later emerged that, despite progress having been made, the two sides were unlikely to meet their self-imposed February deadline. (See Bridges Weekly, 1 February 2012). Negotiations toward an India-EU trade pact have been underway since 2007, with differences over services and automobile tariffs among the key issues preventing the two sides from reaching an agreement.

Barroso, speaking on 13 February at an event in Mumbai, noted that some stumbling blocks still remain in the areas of procurement and services. However, in the area of tariffs - a long-standing issue between Brussels and New Delhi, particularly with regards to automobiles and wine - "basically the work is done," he continued.

"The negotiations have progressed steadily and I am happy to report that we have made a significant step forward," Barroso said in a statement following Friday's summit.

"Our positions are now closer in all areas and the contours of the final agreement are emerging. We have therefore committed to intensify these negotiations. I expect the finalisation of these negotiations in autumn."

EU-India trade has more than doubled, from €28.6 billion in 2003 to over €67.9 billion in 2010, according to European Trade Commission official data. Trade in commercial services has tripled from €5.2 billion in 2002 to €17.9 billion in 2010.

European Trade Commission estimates indicate that India would gain €5 billion and the EU over €4 billion in the short run alone, should the pact be finalised.

Earlier this year, at the annual World Economic Forum in Davos, Switzerland, British Prime Minister David Cameron made a strong call for finalising the New Delhi-Brussels talks by the end of this year, as part of a broader push for the EU to focus on bilateral deals in the absence of a multilateral Doha agreement at the WTO (see Bridges Weekly, 1 February 2012).

Officials from New Delhi and Brussels also inked declarations on areas such as energy, research, and innovation co-operation. In the energy declaration, the EU and India agreed to work together "to improve energy security, safety, sustainability, access and energy technologies," with efforts focusing on areas such as the development of low carbon sources and increased energy efficiency.

Access to medicines

The subject of access to medicines drew particular notice in the days preceding the forum, with some non-governmental organisations - including Oxfam and Médecins sans Frontières (MSF) - making public calls for negotiators to avoid including intellectual property provisions in the pact that go beyond those in the WTO's Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement.

"We have watched too many people die in places where we work because the medicines they need are too expensive," Unni Karunakara, International President of MSF said.  "We cannot allow this trade deal to shut down the pharmacy of the developing world."

India currently supplies over 80 percent of HIV and AIDS medicine currently used in developing countries. Critics fear that including strict IP provisions in the pact could hinder India's ability to provide affordable, high-quality generics to developing country consumers.

ICTSD reporting.

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