[Ip-health] News: Smart Investor- India, EU take another step towards FTA

Terri - Louise Beswick Terri at haiweb.org
Mon Sep 27 01:38:53 PDT 2010

India, EU take another step towards FTA

Pallavi Aiyar/Brussels 25 Sep 10 | 12:40 AM


Negotiations on a free trade agreement (FTA) between the European Union,
the world's largest economy, and India, one of the world's
fastest-growing economies, took one more step towards completion today,
with chief negotiators concluding 2-day talks in Brussels.


According to EU's spokesperson on trade, John Clancy, the talks focused
on the "overall state of play and next steps in the negotiations". He
added that more detailed technical discussions would take place during
the next full negotiating round from October 6-8 in New Delhi.


Sources close to the negotiations on both sides are expressing cautious
optimism about the possibility of concluding an in-principle agreement
in time for the annual India-EU summit, to be held on December 10.


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 EU wants
India to offer a tariff slash on 98 per cent of goods.


"We are getting close to a compromise," said a source on the European
side on condition of anonymity. A key EU demand is for the Indians to
remove cars, wines and spirits and dairy products from their negative
list. While India is reportedly amenable to the request on dairy, a
middle ground on cars and alcohol is being worked out.


One crucial Indian demand is on the services chapter of the
negotiations, to do with the facilitation of visas for Indians with job
offers in the EU. Brussels has been prevaricating, claiming that visas
are a member-state, rather than EU competence. However, there are a
couple of immigration-related directives being pushed for by the
European Commission independently of the FTA that might address some of
the Indian requirements.


One has to do with a proposal for a blue card, the European equivalent
of the American green card. If adopted, it would grant a blue card
holder the same access to pensions, housing and healthcare as an EU
citizen. The blue card would also open up the possibility of job
mobility within the EU member-states. It would further entitle its
holder to family reunification within six months - and spouses would be
permitted to look for employment within the EU as well.


Another proposal is related to intra-corporate transferees, aimed at
making it easier for non-European employees of multinational companies
to be temporarily transferred to that MNC's subsidiaries in EU


While these directives, if approved, do not apply exclusively to India
and are therefore not directly part of the FTA negotiations, their fate
within the EU system will impact on what the European side is able to
promise in the services negotiation.


Similarly, India might be disposed to compromise on the EU's demand for
greater opening of the retail sector, given that New Delhi is already
considering a more general move in that direction.


The key sticking points that remain unresolved, however, are in other
sections of the FTA. Intellectual property rights is one of these. The
EU is pushing India for Trips-plus provisions. But several civil society
groups, including European ones like Medicins Sans Frontieres, have
contended that by demanding India impose greater IPR (intellectual
property rights) protection on medicines, the EU-India FTA could put at
risk the lives of needy patients in developing countries.


The European Commission has been insisting that the chapter on IPR will
in no way "limit India's capacity to produce and export life-saving
medicines". The commission's trade spokesperson also told Business
Standard that "the enforcement part of the IPR chapter will make clear
that it should not interfere with the trade of generic medicines in


The latter assurance gains importance, given that since 2008, several
consignments of Indian generics have been seized by customs authorities
while in transit at European ports.


But despite public EU statements to the effect that India and Europe
have already agreed that the FTA will move beyond Trips, sources on the
Indian side said no such agreement had been reached.


The chapter on sustainable development, which seeks to bind India to a
range of human rights and environmental commitments, is another point of
contention. New Delhi claims there is no room in a trade agreement for
such provisions.


Despite the hurdles, the mood in Brussels is upbeat. For the EU, the FTA
with India is an important test of its new external policy aimed at
deepening relations with strategic partners, of which India is one. If
successfully concluded, the India FTA would be the EU's first with a
major emerging economy. Indian industry body Ficci estimates that
bilateral trade could touch $572 billion ( Rs 26 lakh crore) by 2015 if
the deal goes through.



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