India-EU differ on FTA

Differences on a series of issues have cropped up between India and EU in the ongoing talks on the free trade agreement (FTA).

While Indian Commerce Minister Kamal Nath said the FTA talks were likely to be concluded by 2008, EU Trade Commissioner Peter Mandelson maintained that content of the agreement was more important than the timeline. "There is no point in having a pact which is empty on content," said Mandelson.

Both Nath and Mandelson were speaking at the India-EU business summit held here today. India and the EU have divergent views including issues like government procurement in the proposed FTA.

"We will not include points like government procurement in the talks of India-EU FTA," Nath said on the sidelines of the summit.

However, Mandelson said issues like government procurement, trade facilitation and competition policies were vital for economic growth of the country.

"Competition policy, (Intellectual Property Rules) IPR enables people to know that there is a level-playing field and helps boosting investor confidence," Mandelson said.

India has also objected to the inclusion of issues like animal welfare in the FTA talks. "These are extraneous issues," Nath said in his address to delegates of the summit.

The sides have completed three rounds of talks while the fourth round is scheduled to be held in the next two weeks.

India has offered 90 per cent of its tariff lines (products) for duty elimination in the proposed FTA. "We hope the EU will offer 95 per cent of their products for duty elimination," Nath said.

India also wants to ensure that non-tariff barriers (NTBs) prevalent in the EU do not bother Indian exporters after the FTA is inked.

"We want to ensure that some of NTBs on packaging on standards are not put in. Even though tariff may be low in the FTA, products may not be exported because of packaging and phyto-sanitary standards. The procedure for approval of such things need to be sorted out," Nath said.

He also did some tough speaking on sticking points of the Doha Round of world trade talks. "Tell your American friends that India will not negotiate on subsistence farming. We are willing to negotiate commerce,". Nath told his EU counterpart.

On his part, Mandelson urged India to open its service sector for European companies. "India has an advantage in services. But the problem is in infrastructure, which is the nervous system of the 21st century economy. If you do not have that, you are denying opportunities for your people to which they have a right to. We can partner India in delivering to its people efficient services infrastructure," added Mandelson.