Indias EU parleys reflect its market power

Written by Malcolm Subhan | Updated: Nov 12 2005, 05:31am hrs
This was India Week in Brussels in a very big way. Judge for yourself. Wednesday saw the launch of the Europe-India Chamber of Commerce in the European Parliament, since the EICCs chairman is Nirj Deva, a British MEP, whose roots are in Rajasthan. Well over 150 Indian and European businessmen, MEPs, diplomats and officials from the European institutions attended the day-long session.

Wednesday also witnessed an India-European Union-United States trialogue, organised by the German Konrad Adenauer Foundation, and with the participation of a large delegation from India, led by NN Vohra, co-chair of the India-European Union (EU) Round Table.

The two events provided fresh evidence of the growing importance of India in this part of the EurAsian continent. But the most striking evidence of Indias increasing importance, particularly in the global economy, was the week-long interaction between commerce minister, Kamal Nath, and the EUs chief trade negotiator, Peter Mandelson. The two were in constant touch, and met on Monday, but in London and not Brussels.

What is, perhaps, most important is the fact that this activity, involving economic and political players from India and the EU took place in the framework of their expanding strategic partnership. The EU-India Action Plan to implement this partnership, which Prime Ministers Manmohan Singh and Tony Blair endorsed in New Delhi on September 7, is already being vigorously implemented.

This week also saw, for example, the first meeting of the EU-India High Level Trade Group. The group will explore ways of increasing trade and investment flows between India and the EU. Its work programme includes a discussion on the possibility of a comprehensive India-EU trade and investment agreement. Implementation of the Action Plan, Indias former Ambassador to the EU, Chandrashekhar Dasgupta, told the trialogue participants, can only strengthen Indo-US relations.

He also pointed out that the multipolar world already exists as regards economic matters. The WTO, which sets the ground rules for the global economy, is not dominated by the US, or even the EU, the worlds largest economic grouping. This has been clearly demonstrated by the part played by India, together with Brazil, to ensure that development remains at the heart of the ongoing WTO round of trade negotiations, launched in the Qatari capital, Doha, with the comprehensive Doha Development Agenda (DDA).

The fact is that if the outcome of WTOs Hong Kong ministerial meet in a months time hangs in the balance, it is because of the determination of India and Brazil that the Doha Round should seek, above all, to raise farm incomes throughout the developing world. The EU and US, in other words, must open up their markets to the agricultural exports of developing countries by reducing tariffs. At the same time, they must ensure a level playing field by substantially reducing, if not eliminating, their long-established policy of subsidising their farmers.

The meeting hosted by India in London on Monday failed to narrow the differences between the key players India, Brazil, the EU and the US. EUs trade supremo, Peter Mandelson, made it clear that the EU had made its best, perhaps even final, offer on October 28.

The London meeting, it was hoped, would pave the way for a successful meeting in Geneva, on Tuesday and Wednesday, of a score or so of WTO countries. These hopes were dashed, perhaps because the discussions were largely devoted, as in London, to trade in manufactured products and services. The EU Trade Commissioner claimed that the meeting had been useful, not in narrowing the differences but in defining them. The gap is significant, he added.

For Peter Mandelson, the talks so far have neglected the important interests of the G-90, (the) more needy developing countries. Their interests, he told the press, are not being properly addressed. EU sources in Brussels maintain that full liberalisation of trade in agricultural products by the EU and US would benefit the highly competitive advanced developing countries, like Brazil and India.