Public procurement, services top Indo-EU trade pact talks

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Controversial issues like an open and competitive public procurement policy, as well as mutual recognition pacts on services and on laboratory testing standards, marked the commencement of the fourth round of negotiations of the India-European Union (EU) free trade agreement. This round would end on July 10.

While EU has insisted on making an open and competitive public procurement as well as clauses on competition policy a part of the agreement, New Delhi has brought up its complaints on EU’s reluctance to make their safety and health measures of farm products friendlier to Indian exports. This is also the case with EU’s efforts to evade discussions on a mutual recognition pacts on services and on laboratory testing standards, sources said.

EU has been demanding that India’s public procurement policy should be open, transparent and one that should have a formal grievance redressal system to sort out the disputes regarding award of contracts. EU wants specific clauses regarding public procurement (particularly those on the publication of contract awards as well as debriefing of the unsuccessful bidder) in the FTA to protect its interests and to ensure that its companies get national treatment in India.

As per the World Trade Organisation rules, national treatment would ensure that EU companies would be treated on par with the local companies on this aspect and Indian government (especially state governments) will not be able to give preferences to the domestic companies. However, India, unlike the EU, is not party to the WTO’s Government Procurement Agreement and therefore does not have to comply with that pact.

India is also taking up other contentious issues like the EU’s negative list (items not subject to any tariff reduction) of over 400 items that could adversely impact India’s exports of petrochemicals, chemicals and glass items. Besides, India would point out that EU’s food safety as well as animal and plant health measures—known as sanitary and phytosanitary or SPS measures in international trade parlance—as well as technical barriers to trade were acting as non-tariff barriers (NTB) and meant to protect their domestic industry. It would also take up the EU’s tough norms on fruit export as well as the lack of harmonisation of microbiological standards.