[Ip-health] News: AsiaNetIndia.com- Stepped-up talks revive hope of India-EU FTA

Terri Beswick Terri at haieurope.org
Thu Dec 2 06:32:46 PST 2010

Stepped-up talks revive hope of India-EU FTA   


With the pressure on for the European Union (EU) and India to come up
with a significant announcement at the upcoming EU-India summit on
December 10, a flurry of activity surrounding the ongoing negotiations
for a bilateral free trade agreement (FTA) is giving momentum to the


On Monday, Commerce Minister Anand Sharma met with his EU counterpart,
Trade Commissioner Karel De Gucht in Brussels, only days after the
European Director General for Trade David O'Sullivan was in India,
meeting with Commerce Secretary Rahul Khullar.


But despite the stepped-up interactions, the two sides remain well short
of agreeing to an in-principle agreement on the FTA in time for the
EU-India summit, as was until recently hoped.


EU trade spokesperson John Clancy described Monday's meeting to Business
Standard as one that "allowed for a stocktaking of the situation
following the recent important high-level meeting (between O'Sullivan
and Khullar) in Delhi." Clancy added that both sides had confirmed
"substantial progress" which would be reported at the upcoming summit in


"Both sides aim to use this momentum to ensure a political mandate at
the highest level from the summit to work towards a rapid and timely
conclusion of the FTA," he said.


Negotiations on the core issues of trade in goods and services have
reportedly seen real progress. The two sides have already agreed to
eliminate tariffs on 90 per cent of all tradable goods. What is
currently under discussion is an upping of this figure, with India
asking the EU to abolish tariffs on 95 per cent of goods, while the EU
wants India to offer a tariff-slash on 98 per cent of goods.


The key sticking points that remain unresolved, however, are in other
sections of the FTA. The chapter on sustainable development, which seeks
to bind India to a range of human rights and environmental commitments,
is a particularly contentious issue. New Delhi claims there is no room
in a trade agreement for such provisions, but Brussels insists the
European Parliament will refuse to ratify any agreement that does not
include the chapter.


Intellectual property rights are another area where India and the EU
have found it tough going to find common ground. The EU is pushing India
for Trips-plus provisions which New Delhi has rejected.


Generic drug seizures at EU ports have been a further complicating
issue. Between 2008 and 2009, some 20 odd cases of seizures of
Indian-made generic drugs in transit at European ports took place. In
May, India along with Brazil took the matter to the World Trade
Organisation (WTO) where they were asked to establish consultations with
the EU as a precursor to the setting up of a Dispute Settlement Panel.


The EU cites domestic customs laws that allow goods in transit to be
stopped if they are suspected of being either illegal or substandard, as
justification. The generic drugs in question were off-patent in both
India and the countries to which they were destined. However, in some
cases, the seized drugs were patent protected in the EU.


India maintains that European countries are creating trade barriers
against Indian drug companies to protect the interests of their firms.


The EU directive in the spotlight is a customs regulation, 1383, which
lays out the details of the condition under which European customs can
legitimately stop goods in transit. India and the EU have held several
rounds of talks to discuss under what conditions Regulation 1383 can and
should be activated. India has asked for a clause in the regulation to
be amended.


Sources say it is likely that the EU-India summit might see a
breakthrough announcement on the matter, with the European Commission
currently in the process of revised the offending regulation as part of
an internal EU move that is taking place in parallel to the
consultations with India.


Clancy confirmed there had been "very good progress" on the issue of
generics and that the two sides were "very close to a solution on this


In October, Anand Sharma had told reporters the European side had
"accepted" India's position on the matter and that India would be
withdrawing its case at the WTO. While officials on both sides were
taken aback at the time, no resolution in fact having been reached, the
odds for a December 10 announcement of a settlement are high.


The EU-India summit will be attended by Indian Prime Minister Manmohan



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