EU changes tack, eager to put free trade pact negotiations on fast track

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Kolkata, May 16: The European Union, in a change of mind, is eager to increase the pace of negotiations for free trade agreement (FTA) with India, even as the Doha round of talks under the World Trade Organisation looks headed for collapse.

Doha’s failure would allow India and the EU to do without the WTO concept of most-favoured nation (MFN), in which every time a country lowers a trade barrier or opens up its market for particular goods and services, it has to do so for all its trading partners.

Earlier this year, in February, senior EU officials had told this correspondent during a visit to the European Commission’s headquarters in Brussels that the EU would go slow on the FTA negotiations.

Last month, however, the EU decided to push for a revised Trade & Investment Development Programme. And the TIDP will form the basis for the FTA.

Daniele Smadja, ambassador and head of the delegation of the European Commission to India, Nepal & Bhutan, who was here recently, declined to comment on the progress of the FTA but said the focus is on the TIDP.

“The EU is considering to allot more for a revised Trade & Investment Development Programme, which was an Euro 13.35 million programme when launched in May 2006,” Smadja told FE.

Broadly, while India wants the EU to open up its service sector, the EU wants more access for its goods and investment.

But the EU has no less focused on the Indian services market, especially the aviation sector, apart from new areas like the clean development mechanism, chemical management, water management, waste management and energy efficiency.

Smadja said the EU is trying to push through a India-EU horizontal aviation agreement that would lead to an open skies policy. The FTA would focus on services and investments. But, since the 27 EU member states do not have a common policy for services and investment, the commission has to get them to agree to bring their existing bilaterals under the control at the EU level.

Smadja cited a ruling by the Court of Justice at Luxembourg last year said that the existing bilaterals needed to be controlled at the EU level and not by the EU member states individually.