Why India-EU trade pact is still difficult to achieve?

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Syllabus: GS 2

Synopsis: The EU is in a turbulent situation currently due to COVID-19, Brexit, and international tensions with the US. This has unsettled the EU and worsened internal issues.

Introduction 

India is planning to start negotiations on investment and trade agreements with the European Union (EU). 

• However, these discussions might face the same problems as faced during  2007 discussions on free trade agreements.
• The EU was one of India’s major trade and investment partners before COVID-19 and Brexit. But it is facing many internal issues at present. To revive its relations with the EU, India need to recalibrate its policies. 

What are the issues facing the EU at present?

First, Euroscepticism is impacting the unity of the EU. After the UK, many other EU member countries are resisting the EU Policies. Unity is lacking on issues such as-Eurozone, migration crises, secularism, and implementing COVID-19 lockdowns. There is no consensus upon the strategy for dealing with China, Russia, Turkey, and Iran.

Second, EU countries are facing many Internal issues. For the first time in 40 years, Netherlands faced Pandemic led riots.

Third, deteriorated relations with the US. During the Trump regime in the US, the EU-US relations took a downfall. Now many EU countries are looking for greater self-reliance in security. However, Germany, the Netherlands, Portugal, and others are uncomfortable with the prospect of building larger military capabilities.

The EU is trying to avoid involving in the US-China conflict. It has signed the EU-China Comprehensive Agreement on Investment which was decided after negligible consultation with Washington.

Fourth, Vaccine nationalism is widening the divide. The COVID-19 introduced divisive vaccine nationalism into the Union. Germany and France restricted exports of personal protective equipment. 

The German government had negotiated a separate vaccine contract with Pfizer in September last year. On the other hand, it is a strong advocate of European solidarity.

However, the EU’s procurement programme for the union from Astra-Zeneca, Moderna and Pfizer, has filled the gaps to an extent on this part. 

Conclusion 

• The EU will require enormous political will and clever skill to resolve these innumerable and diverse problems without further widening the existing gaps. Trade agreements with India will be the least of its problems.