In an interview with Nayanima Basu, Philippe de Buck, director general, Business Europe — the most influential industry lobby of Europe — talks about the potential of the broad-based trade and investment agreement (BTIA) with India. Edited excerpts:
How interested are European businesses in the BTIA with India?
The European business community is very interested in India, as India is interested in the European Union. We are very large trade partners. This is a long-standing relationship. We have seen investments grow over the years and lot of companies have come here. So, the trade agreement is an important step forward for both. We have very strong commitments from the European business to go for it. These want us to make progress. We seek open trade on the basis of prosperity, development and modernisation of an economy. The key in any trade agreement is market access, which is important for both sides.
For European businesses, what major gains do you see emerging from this deal?
In a complex economy, goods and services go together. You cannot develop a value chain without transport, consultancy, a legal chain and banking and insurance. So, an open services market is the key element. For goods, you have to discuss the tariffs. But for services, you have to adjust legislations and organisation. This is more complex because it requires decisions at the national level. We are also interested in public procurement because it concerns modernisation in infrastructure and transport.
Is the European industry concerned at the possible impacts of the trade agreement on Europe’s domestic economy, especially during a crisis?
It would lead to a lot of discussions. The regulations would need to be changed, and each international treaty has to be brought into the European Parliament. We want a real, comprehensive free trade agreement, not a superficial one. The agreement must be balanced and it should be between equals. We have never felt free trade leads to job losses or any other impact, which is why we have single market in the form of the European Union. Of course, we are going through a crisis now, but it is not due to the single market.
What are some of the concerns raised by European firms doing business in India?
The main problem is tariffs. Tariffs in certain areas really turn out to be a major impediment to business. There is complexity in regulations, and these needs to be simplified. And, we certainly face competition here. It is not that we fear competition, but it should be fair and open.
In the negotiations, one of EU’s foremost demands was reduction in India’s high tariffs in wines and spirits and the automobile industry. What is the view of European businesses on this?
We understand there can by asymmetric issues, but the main objective is there must be a tariff-free economy. The main aim of the free trade agreement is zero tariffs. I think the issue of high tariffs in wines and the auto sector has become one of stumbling blocks in the talks. But surely, this is not the only one. However, the talks are going in the right direction, as we understand there is political will on both sides to go ahead with the talks.
Europe had also insisted on sustainable development as part of the trade deal. Do European businesses share the same view?
In modern free trade agreements that need parliamentary sanction, it is important to take care of some important elements. We need to ensure the country we are partnering has adhered to international labour laws, child labour laws and climate change issues. There could be some asymmetry in this, but we can solve all these through the free trade agreement. But yes, though a free trade agreement is about trade and investment, we are in favour of sustainability. It is an important element.
What is your view on India’s demand for more access for its professionals into Europe, primarily by expansion of some of services and a liberal business visa regime?
It is a strong demand. We support it fully. We need Indian companies to invest in Europe, and we also want the movement of professionals to happen. You have so many capabilities in information technology, where the movement of people is required. But yes, visa is an issue. Also, it has to be a free trade agreement between equals.
The issue of drug seizures became a point of conflict between the EU and India. Recently, Netherlands had seized a drugs consignment from India. The EU is changing its customs laws in this regard. What do European pharma companies feel about this?
This is a sensitive subject, as this touches health and safety. The key element here is respect for intellectual property rights, and that is a battle between generics and the origin of drugs. I think we can solve both together. I know this issue has been discussed with India at a political level, but we are not aware of any changes in the laws. However, pharma companies have made it clear if the EU signs a trade deal with India, it has to be ensured that generic drugs from India to European markets respect the intellectual property rights of those who have invented and developed these.