The Free Trade Agreement (FTA) between India and the European Union (EU) has an option of mediation of outside experts for settlement of disputes, according to the text of the agreement made public on Friday. While the provisional text has been put in public domain, the tariff schedules will be released later.
The mediation for looking at disputes would be led by a person who is neither a subject of the EU member country or India. The person agreed to as mediator also should not be an employee of either of them.
FTA adds mediation option; either side can refuse or ignore within 30 days
Both sides will have the option to request for mediation in a dispute. They will also have the freedom to reject the request. Even by not responding to the request for mediation for 30 days would be considered as rejection. Mediation for dispute settlement is an additional measure made available by the FTA.
The traditional method for dispute settlement through a panel. The panel will be selected from the list notified by either side.
EU FTA spells out mediation rules; UK CETA only mentions it
A separate annexure in the chapter on Dispute Settlement in the FTA with the EU has detailed the procedure of mediation. In the Comprehensive Economic and Trade Agreement (CETA) with the UK – that preceded the FTA with the EU by a few months, there is a mention of mediation as one of the ways of dispute settlement but without details.
Mediation is a common and increasingly popular feature in modern FTAs. While the “heavy lifting” of trade enforcement is often done through formal panels (arbitration), mediation serves as a faster, cheaper, and more collaborative bridge between informal talks and a legal battle, according to experts.