Talks on India-EU trade pact hit roadblocks

Press Trust of India, January 29, 2008

New Delhi: Negotiations for a trade agreement between India and EU, which was put on fast track in November last, has hit roadblocks on the issue of government procurement.

While India is willing to agree for a transparency clause in the proposed agreement, it does not want to commit on government procurement, Additional Secretary in the Commerce Ministry Rahul Khullar said here today. “They (EU) also want to place on the agenda transparency which is okay and government procurement which is not so okay,” he said at a CUTS seminar on Preferential Trade Agreements and India .

Non-trade barriers are another area of discord between the two sides. India wants that Sanitary and Phyto-Sanitary (SPS) measures should not be used to block trade. But the EU does not seem to be agreeing with India s contention, he said. “SPS measures are essentially in place to protect trade because tariffs have ceased to be relevant. Those are precisely the areas where there is very little movement and if there is no movement there will be no deal,” Khullar said.

India and EU had agreed at their annual summit in New Delhi last year to put the market-enhancing Trade and Investment Agreement on a fast track with a deadline of December 31, 2008 for completion of negotiations.

Describing the talks on a bilateral trade deal as “the most challenging”, Khullar said the agreement also has to be in conformity with the rules of multilateral regime under the World Trade Organisation. He said there were legal complications derived from WTO commitments in Geneva. The two sides have to reconcile what they “can do in Geneva and what they cannot”.

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