FTA negotiation tops agenda at India-EU bilateral summit

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New Delhi: The ongoing negotiations on the free trade agreement (FTA) between India and European Union will top the agenda at the bilateral summit between both the sides on Friday, even as the later has been insisting on inclusion of non-trade issues like child labour and human rights in the duty talks for the duty-free deal. Both the sides are on the verge of a trade war on issues related to wines, spirits as well as pharmaceuticals.

“We hope the summit gives inspiration and political impetus to fast track the talks,” said Daniele Smadja, ambassador, delegation of the European Commission to India, Nepal and Bhutan.

EU is among India’s biggest trade partner, with 23% of the goods manufactured in the country heading to the economic block. Though negotiators of both the countries will not meet during the India-EU summit, the next round of talks are scheduled later this month.

So far seven rounds of negotiations have been held on FTA. It is at a critical phase as it will involve bargaining on duty cuts, market access on services sector, IPR as well as toning down non-tariff barriers. To make matters complex, the European Commission has been insisting on including non-trade issues like human rights and child labour policies in the duty free trade talks.

Smajda added that time has come to jump in to “cold waters of give and take”. “There are difficult negotiations ahead of us, even as the journey so far has been good. There are domestic constituencies on both sides, who have concerns on certain issues… There are lot of issues on the social agenda which will have to be addressed. The result of the talks will depend on positions that we have (on them),” she said.

The European Parliament has been demanding inclusion of social issues in the FTA. In fact, a report by the European Parliament called for investigations in to extra judicial killings in Jammu & Kashmir, as well as human rights and democracy issues along with social and environmental standards in the FTA.

Further, the Lisbon treaty, which was ratified in the first week of November 2009 and is designed to make the EU stronger, mandates that bilateral engagements like trade agreements will have to take the “opinion of the European parliament before it is inked. Thus, the India-EU FTA will have to get a favourable opinion from the European Parliament, before it can be operationalised.