India-EU trade pact hangs on non-tariff barriers

The Financial Express, January 30, 2008

The European Union’s (EU) reluctance to make its safety and health measures of farm products more friendly to Indian exports and the Union’s efforts to evade discussions on a mutual recognition pact on professional qualifications, have now become major sticking points in the talks on the proposed India-EU free trade agreement (FTA).

Noting that EU’s food safety as well as animal and plant health measures—known as sanitary and phytosanitary or SPS measures in international trade parlance—were acting as non-tariff barriers (NTB) and meant to protect their domestic industry, additional secretary in the commerce ministry Rahul Khullar said, “If there is no movement there, there will be no deal”. He was speaking at a conference on Preferential Trade Agreements organised by CUTS International.

During the visit of EU trade commissioner Peter Mandelson in November last year, commerce and industry minister Kamal Nath had said New Delhi wanted non-trade and extraneous issues like animal welfare and labour to be kept out of talks the India-EU FTA. He had said, “There are NTBs and technical barriers to trade (placed by the EU). We want to ensure that some of the NTBs on packaging on standards are not put in. Even though tariff may be low in the FTA, products may not be exported because of (EU’s) packaging and phytosanitary standards.

The procedures for approval these are things that need to be sorted out.”

On Tuesday, Khullar pointed out that the EU had taken a very long time to ink a mutual recognition agreement (MRA) with Japan and said the EU negotiators seemed averse to MRAs and “are ducking the issue with India”. An MRA is signed for fulfillment of standards or criteria for the authorisation, licensing or certification of services suppliers of the trading partner countries. MRA would result in the trading partners recognising the education or experience obtained, requirements met, or licenses or certifications granted in each other’s country in those service sectors. An MRA with the EU would give a huge boost to the Indian services sector.

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