Indo-EU Engagement Must Shift From Trade To Political Issues

Written by Malcolm Subhan | Brussels, Jan 4 | Updated: Jan 5 2004, 05:30am hrs
What can Indian exporters to the European Union (EU) expect in the new year Well, textile exporters will find out in the next few days whether the EU plans to impose a 10.4% anti-subsidy duty on its imports of bed linen from India. And exporters of Basmati, other than the traditional, pure line varieties, know that from January 1 their exports are subject to an import duty of 264 euro per tonne.

But Indian exporters should look for the silver lining, as EU officials might say. After all, the EU may slap an anti-dumping duty on its imports of bed linen from Pakistan before the end of March. And Pakistan, with its exports of super but non-traditional Basmati, will be hit much harder than India.

Its natural to look at India-EU relations in this way, because trade has been the driving force behind these relations since those distant days, some 40 years ago, when Dr KB Lall came to this city to safeguard Indias exports against the loss of Commonwealth preferences, in the event that Britain joined the 6-nation European Economic Community, the forerunner to the 15-nation EU.

And the EU also looks at India through the perspective of trade. Ask Unions chief trade negotiator Pascal Lamy, and European textile industrys chief lobbyist in Brussels Bill Lakin, about the prospects of doing business with India, and you will hear both saying some pretty harsh things about the Indian governments protectionist policies.

Mr Lamy, in fact, has asked for consultations with India in the WTO. At issue: over the 27 anti-dumping measures New Delhi has taken against the European exports between 1999 and 2003. You would never think, from this single-minded focus on trade and trade disputes on both sides, that India and the EU are global actors in the multipolar world bound together by values of democracy and pluralism. The words are taken from the statement issued jointly by India and the EU at the highest political level just over a month ago.

The occasion was the India-EU political summit in New Delhi in November. Such bilateral summits are a relatively rare feature of the EU calendar; they are largely limited to countries such as China, Japan, the US, and Russia. In New Delhi, the two sides expressed satisfaction at the summits positive outcome, which has further reinforced the India-EU relationship.

The challenge facing both India and the EU in the coming year is to use the political will they displayed in New Delhi to shift the focus of their relationship from trade to political issues. Trade issues remain important, and trade disputes will continue to mobilise time and energy on both sides. But their solution is linked, more than ever before, to the outcome of the Doha development round of trade negotiations in Geneva. And those negotiations are in limbo. Progress will be slight this year, and agreement may not be reached for another two years. A major reason for the delay is the US presidential and Congressional elections, and the clear American preference for free trade arrangements. Another major reason is that the EU will be increasingly preoccupied with its enlargement, with the entry of eight Central and East European and two Mediterranean countries on May 1.

The following month will witness elections to the European Parliament in all 25 EU countries. And in October, the European Commission, the EUs executive arm, will have a new president and a new set of commissioners. The mantle of the EUs chief trade negotiator, presently worn by Mr Pascal Lamy, will fall on other shoulders.

Only politics can replace trade as the driving force behind Indias relations with the EU. What is more, the time is ripe for India and the EU to work together in the political arena, especially as they rightly see themselves as global actors in the multipolar world. And at their New Delhi summit they listed the areas in which they can collaborate in the maintenance of international peace and security.

The use of the term multipolar world, in the joint statement issued after the summit, is significant. Out of deference to the US, which sees itself as the focus of a unipolar world, the EU has shied away from the term multipolar. It favours the term multilateralism.

At the same time it is clear that key members of the present 15-nation EU are keen to loosen the US political stranglehold and even move out from under the shelter of the US nuclear umbrella. With eight former Soviet satellites entering the EU, and closer EU-Russian relations, the cold war is clearly over.

Hence the EUs attempts to establish a political foothold in Americas backyard - Latin America. Hence also its attempts to develop closer political relations, through regular EU-Asia summit meetings, with East and South-East Asia. More to the point, the Asian countries in question see their relations with the EU as promoting a multipolar world.

India can tag along with the Association of South-East Asian Nations (Asean). Or it can resolutely develop its own political ties with the EU, thus helping realise its vision of a multipolar world. The New Delhi summit pointed to the obvious starting point: their support for the fight against international terrorism, wherever it occurs and regardless of its motives. Given Indias long-running fight against the terrorism unleashed by fundamentalist organisations, and its geo-strategic location, India has many assets it can bring to the fight against international terrorism. Intelligence is only one of them. It is very important, therefore, that India and the EU upgrade their joint working group on terrorism, which held its fifth meeting last October.

However, India can also work closely with the EU on conflict resolution and prevention, given the experience it has gained through its contributions to UN peacekeeping operations, starting with operations in the Congo some four decades ago.

Last but not least, a closer India-EU political relationship will impact favourably on their trade relations. The 10 new entrants are the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia and the two Mediterranean islands of Cyprus and Malta.