No dilution of India, EU trade pact:

No dilution of India, EU trade pact:

Context:

• India and the European Union are yet to finalise a date for re-launching their Free Trade Agreement negotiations stalled since 2013.

India – EU Foreign Trade Agreement (FTA) deadlock:

• EU was quite upbeat on pushing the talks, which had started in 2007, and finalize a date for a formal round of negotiations to take place. However, India was not keen to do so unless both sides resume the talks afresh.
• The Conclusion of the FTA was the top most agenda of the European leaders, but India was more eager to discuss issues related to counter-terrorism and security.

What was discussed ?

• The issue of data adequacy and greater market access was discussed at length during the summit-level.
• The Bilateral Trade and Investment Agreement (BTIA) was almost mentioned as a passing reference in the India-EU joint statement, which stated that both sides agreed to “re-engage actively towards timely relaunching negotiations for a comprehensive and mutually beneficial India-EU BTIA.”
• The BTIA talks have been stuck mainly because over slashing of import tariffs on European cars and alcohol and recognizing India as ‘data-secure’ country that will enable a free flow of data between India and EU.
• EU highlighted that two-way trade that has reached $95 billion in 2016 can be further boosted by having the FTA.

Trade concerns:

• India has allowed tens of bilateral investment treaties to lapse, including those with EU states, so it can bring these in line with a model treaty from 2015.
• Another issue holding up the trade talks has been the EU not granting “data secure” certification to India.
• India does not have a stand-alone data privacy law yet and the state recently went to great lengths to create a false dichotomy between development and privacy during the right to privacy hearings in the Supreme Court, including, by (unsuccessfully) arguing that privacy was an elitist concern.

What is India demanding?

• Other sticky points in the negotiations have been India wanting a greater ease of movement of temporary skilled workers to provide services in the EU.
• This EU and other developed nations have been historically reluctant about moving forward on this issue and this has become more challenging with the rise of populism and protectionism in Europe.

What is EU’s stand on it?

• The EU wanting greater market access for its automobiles and its wines and spirits.
• The EU is, commendably, at the forefront of protecting citizens’ rights as regards what happens to their data online.
• It would certainly be a shot in the arm for consumer rights and privacy standards in the digital age if India were to adopt and implement strict standards for handling data, an outcome desirable in itself.

Way ahead

• India and the EU should continue to welcome each other’s leadership roles in the world, because of commonly shared values.
• EU is India’s largest trade partner and it is also, like India, wary of China’s political (the summit declaration makes a reference to freedom of navigation principles) and economic dominance.
• EU is concerned about China flooding global markets with inexpensive steel and its response to China’s Belt and Road Initiative (OBOR) has been lukewarm, but the strength of China’s relationship with EU member states themselves is heterogeneous, with China trying to make inroads into Eastern and Central Europe through infrastructure investments.
• With around €100 billion in bilateral goods and services trade last year, India and the EU have a lot to gain from a trade deal.
• It will certainly pay for both India and the EU to keep each other close as they feel their way around the emerging international order.