{"id":51602,"date":"2019-08-27T19:00:33","date_gmt":"2019-08-27T13:30:33","guid":{"rendered":"https:\/\/blogadmin.forumias.com\/?p=51602"},"modified":"2019-08-27T17:00:47","modified_gmt":"2019-08-27T11:30:47","slug":"7-pm-talking-trade-with-the-eu-27th-august-2019","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/7-pm-talking-trade-with-the-eu-27th-august-2019\/","title":{"rendered":"7 PM | Talking trade with the EU | 27th August, 2019"},"content":{"rendered":"\n<p><strong>Context: <\/strong>Significance\nof India-EU Free Trade Agreement<\/p>\n\n\n\n<p><strong>India-European Union (EU) trade relation genesis:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>India-European Union relations started\nway back in the early 1960s, when India pursued diplomatic relations with the\nEuropean Economic Community. <\/li><li>The signing of a cooperation agreement\nin 1994 broadened the scope for bilateral relationship beyond trade and\neconomic cooperation.<\/li><li>Key bilateral agreements signed include\nthe Science &amp; Technology Agreement (2001), the Joint Vision Statement for\npromoting Cooperation in the field of Information and Communications Technology\n(ICT) (2001), the Customs Cooperation Agreement (2004), etc.<\/li><li>India\nand the EU first started negotiations&nbsp;in 2007 on a Free Trade Agreement\n(FTA) to cover trade in goods, services, intellectual property and foreign\ninvestment. However, 13 rounds of negotiations have not yielded a treaty\nto&nbsp;regulate trade and investment between the two sides.<\/li><\/ul>\n\n\n\n<p><strong>Issues and challenges before India-EU\nFTA:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Tariffs:<\/strong> In terms of trade in goods,\nany FTA tries to bring down the tariff rates from the most favored nation (MFN)\nrates. One of the major demands of the EU is that India should lower its tariff\nrates on European automobiles and wines and spirits.&nbsp;<\/li><li>A&nbsp;lowering of tariffs may well result in greater trade\nwith&nbsp;the EU, but for India this may mean more imports than exports. There\nwill be a greater opening in the Indian market for European goods than in the\nEuropean market for Indian goods. <\/li><li>EU tariff rates are already quite low and thus, apart from\nsectors like textiles and fisheries, India\u2019s exports to the region&nbsp;might\nnot increase significantly if tariffs are cut.<\/li><li><strong>Sanitary and phyto-sanitary\n(SPS) measures:<\/strong> The EU has been imposing stringent\nlabeling requirements and trademark norms, for instance, which have dented\nIndia\u2019s exports. About two years ago, India\u2019s&nbsp;export of Alphonso mangoes\nto the EU suffered&nbsp;due to stringent non-tariff barriers (SPS).<\/li><li><strong>Trade in services:<\/strong> India to benefit from an FTA with the EU,\nit needs strong binding promises by the EU on liberalizing trade in services\nespecially for the supply of services in what are known as modes 1 (range of outsourcing\nactivities) and 4 (natural persons).<\/li><li>However,\ngiven the high unemployment rates in the EU due to economic slowdown, one is\nnot sure to what extent the EU is willing to make commitments to liberalize\ntrade in services.<\/li><li>And\nthe\nEU, however, has been unable to take a unified position on the matter, being\nsubject to the individual immigration policies of member states.<\/li><li><strong>Intellectual\nproperty: <\/strong>The EU is keen that India should adopt\nstringent IP protection standards even if that means going beyond the WTO\nspecified standards&nbsp;that all countries, including India and the EU, have\nmultilaterally agreed. <strong><\/strong><\/li><li>India\nwill not and should not agree to additional&nbsp;protection measures as this\ncould&nbsp;compromise public health and raise other compelling concerns.<strong><\/strong><\/li><li><strong>Bilateral investment treaty (BIT):<\/strong> The model BIT does not contain an MFN\nprovision, excludes taxation measures, and makes it mandatory for foreign\ninvestors to exhaust domestic judicial and administrative remedies for at least\na period of five years before pursuing a claim under international law.<strong><\/strong><\/li><\/ul>\n\n\n\n<p><strong>Need for speeding up the negotiations of\nFTA between India-EU:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>India is the only major power lacking an\nFTA with any of its top trade partners, including the EU, the U.S., China and\nGulf economies. This situation is not tenable as most trade is now driven\neither by FTAs or global value chains.<\/li><li><strong>Competition\nfrom other countries:<\/strong> Brussels concluded a trade deal with\nVietnam and a historic FTA with the Mercorsur countries in South America.\nIndia, in the meantime, is hanging on to its Most Favored Nation (MFN) status. <\/li><li>Its status under the EU\u2019s Generalized\nScheme of Preferences (GSP) will face rising competition from Pakistan or Sri\nLanka, who enjoy GSP+ benefits.<\/li><li><strong>Trade\nwar:<\/strong>\nAs the world economy in general and particularly Indian economy begins to\nsuffer from the US-China trade war, it is the better time for India to pursue a\nFTA with EU.<\/li><li><strong>Convergence:\n<\/strong>Areaslike e-commerce have registered\nsignificant convergence because India\u2019s position on data privacy is on the same\nlines of European Union\u2019s.<\/li><li><strong>Geo-strategic\nperspective: <\/strong>with Americas hostile spotlight focusing on India,\nand lingering concerns about the regional comprehensive economic partnership\n(RCEP), India must realize the long-term strategic benefits of a trade deal\nwith EU<\/li><li><strong>Willingness<\/strong>: EU\nnegotiators are now more willing to make concessions on labor or environmental\nregulations, which used to be insurmountable obstacles. <\/li><li>The collapse of the Transatlantic Trade and\nInvestment Partnership and concerns about excessive economic reliance on China\nhave propelled the EU to become a little more pragmatic, which New Delhi should\nleverage before it\u2019s too late.<\/li><\/ul>\n\n\n\n<p><strong>Way\nforward:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>To agree\non the FTA despite the differences between the EU\u2019s and India\u2019s negotiating\nagendas in a tough economic climate, both partners will need to show\ndetermination as others have shown in negotiating mega-regional agreements. <strong><\/strong><\/li><li>The\nchallenges and constraints are not insurmountable. Given both sides\u2019 reluctance\nto agree to the other\u2019s demands, they should begin by negotiating less\ndifficult sectors. This will demonstrate willingness to get back to the\nnegotiating table and send a clear signal that both sides want to talk further.\n<strong><\/strong><\/li><li>It is\nimportant for India to overcome its siege mentality, commit to institutional\nreform, and confront domestic vested interests. Reaching an agreement that will\nbring mutual benefit to both the EU and India will be a long journey, but,\ndespite several missed deadlines, it is not out of reach.<strong><\/strong><\/li><\/ul>\n\n\n\n<p>Source: <a href=\"https:\/\/www.thehindu.com\/opinion\/op-ed\/talking-trade-with-the-eu\/article29262169.ece\">https:\/\/www.thehindu.com\/opinion\/op-ed\/talking-trade-with-the-eu\/article29262169.ece<\/a>.<strong><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Context: Significance of India-EU Free Trade Agreement India-European Union (EU) trade relation genesis: India-European Union relations started way back in the early 1960s, when India pursued diplomatic relations with the European Economic Community. The signing of a cooperation agreement in 1994 broadened the scope for bilateral relationship beyond trade and economic cooperation. Key bilateral agreements&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/7-pm-talking-trade-with-the-eu-27th-august-2019\/\">Continue reading <span class=\"screen-reader-text\">7 PM | Talking trade with the EU | 27th August, 2019<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":49370,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[130],"tags":[],"class_list":["post-51602","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-7-pm","entry"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2019\/07\/7-PM.png?fit=1000%2C500&ssl=1","views":{"total":0,"cached_at":"","cached_date":1704802613},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/51602","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=51602"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/51602\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media\/49370"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=51602"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=51602"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=51602"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}