Open services sector or face backlash in EU, says Lamy

The European Union (EU) warned of a backlash from trade unions in its member-states if countries like India did not open up its services sector to the levels desired by it.

"India should improve its services offer, else trade union sensitivities on employment could result in opposition. The notion of two-way street would be recalled to us," European Union Trade Commissioner Pascal Lamy said during a press conference at the end of his day-long visit to the country.

He asked India to liberalise sectors like telecommunications, retail, legal and accounting services in the offers made to WTO membership for the services sector negotiations.

Speaking to reporters after a seminar on the World Trade Organisation organised by the Confederation of Indian Industry (CII), Commerce and Industry Minister Arun Jaitley indicated India was willing to offer more liberalisation in some service sectors though he was not in favour of opening up accounting, legal and retail services in the wake of concerns expressed by domestic players.

Although both Jaitley and Lamy asked the WTO membership to move ahead with the stalled trade talks, there were little indications of the two trading partners softening their opposition to various issues on the negotiating agenda.

While India was unwilling to change its stance on agriculture, the EU refused to drop Singapore issues from the WTO's agenda and asked larger developing countries like India, China and Brazil to offer greater market access.

Amid all this, Lamy said the 2004 deadline for the completion of Doha round of negotiations might be difficult to meet though most WTO members were in favour of resumption of talks. "At the WTO, we are on a ready, steady, go mode. But we need to go.... to provide by March-April the window of doing what was not done at Cancun," he said, adding that modalities for the negotiations should be fixed by spring.

India stuck to its guns on market access in agriculture on the ground that the sector affected the livelihood of over 600 million farmers, while EU made a case for negotiations on Singapore issues comprising investment competition policy, trade facilitation and transparency in government procurement.

Lamy also sought the inclusion of labour on the negotiating table in the next round of trade talks. Lamy was, however, soft on the issues of investment and competition having agreed to drop the demands for the inclusion of the two issues at the Cancun ministerial last September.

Differences on the bilateral front were also visible, with Lamy repeatedly criticising India's anti-dumping procedures saying it was not WTO-compatible. EU has already approached the WTO's dispute settlement body contesting the procedures adopted by India in levying anti-dumping duties against 27 items.

Both, however, said they were willing to discuss the matter to iron out differences.

The high import tariffs in India on wines and spirits was another area that came up for discussions.

Lamy, however, appeared positive on the developments at the recent Saarc summit on setting up of Safta and offered to help countries in the region to develop a common trade area.