The EU-India Summit last Friday sent a clear signal that the European Union (EU) and India are jointly tackling one of the key challenges facing us all: how to find new sources of economic growth. We are not sitting idly by in the face of sluggish global growth but are working together to find new markets and break down barriers to foreign trade.
The EU and India have already taken great strides towards the conclusion of a broad-based trade and investment agreement. This agreement will be highly ambitious and will not be limited to the elimination of duties on most of our bilateral trade, but cover trade in services, investment, regulatory issues and many more.
Friday’s Summit has demonstrated our joint determination to make a success of this deal. Significant progress has been made and the contours of an ambitious deal are emerging. We now need to put the final touches in place so that we can conclude in the spring of 2011.
We engage in trade because it is mutually beneficial. Any deal we conclude will be a deal that benefits us both, as otherwise the effort is not worthwhile. We reject the idea that trade is a zero-sum game. Our vision of trade negotiations is a cooperative one, where only win-win solutions are on the table. Global markets are increasingly integrated and this needs to be reflected in creating closer trade ties between us.
For example, three quarters of imports into the EU and India are essential inputs for the manufacturing and services sectors, often ending up in exports themselves. So accessing goods at the best price, in fact, helps our industries stay competitive in the global marketplace. We import to export. In the global economy, no country is an island.
Indian and European consumers will also benefit from cheaper imports, which are often in different market segments to our own production. Similarly, both India and the EU would benefit from facilitating the temporary provision of services by highly qualified professionals.
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This trade deal would be the largest and most significant deal ever concluded by either the EU or India. A trade deal of this magnitude and ambition would generate sizeable benefits for both our economies with substantial growth in GDP of both India and the EU. It would be of global economic importance.
Our current trade performance clearly falls far short of its potential. Both our economies, therefore, stand to benefit from shifting foreign trade up a gear. The agreement is designed to make it easier for Indians and Europeans to do business with each other and for workers as well as consumers to feel the benefit.
Some people have suggested that our trade deal would endanger India’s role as pharmacy to the world. Nothing could be further from the truth.
We agree that nothing should prevent the poorest people from accessing life-saving medicines. This remains a core principle and will be reflected explicitly in the trade agreement. The agreement will in no way limit India’s scope for developing and exporting life-saving medicines. Specifically, it will not stop India from using its flexibilities under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), in particular the possibility of manufacturing generic medicines under compulsory licence for export to other developing countries facing public health problems. The intellectual property chapter of our trade deal would promote innovation and investment in the knowledge economy.
Trade can raise and spread prosperity. We are determined to make a success of the EU-India free trade agreement (FTA) so that it can raise living standards. Friday’s Summit has demonstrated that the EU and India are able to find solutions that benefit us both. We will now be exerting ourselves and intensify our efforts to solve the remaining issues. At last week’s Summit we came one step closer to finalising this deal. We now need to go the extra mile to ensure the benefits of such an agreement are translated into real opportunities for people and businesses on the ground.
Anand Sharma is Union Minister for Commerce and Industry and Karel De Gucht is European Trade Commissioner