Brussels, 18/01/2012 (Agence Europe) - Negotiations between the EU and India on a free-trade agreement have made real progress, which the bilateral summit in February could make official.
During her visit to Bangalore where, on 16 January, she and Indian Foreign Minister S.M. Krishna chaired a meeting to prepare for the annual EU-India summit due to take place on 10 February, EU High Representative Catherine Ashton repeated the EU's commitment to concluding an agreement which she described as being of “enormous importance” to both partners “as soon as possible”. “Our increased collaboration via trade and investment is a way of guaranteeing higher growth in the future”, she said on Monday.
Talks on a bilateral EU-India free-trade agreement, which were begun in 2007, have entered a critical phase. After a surge in the autumn, technical negotiations have intensified in an effort to resolve the outstanding issues before the February summit in New Delhi. The agreement, once expected for the start of 2012, will require more extensive work but the progress made could “make a political agreement possible on some of the key issues” in February, according to the daily Les Echos.
Among the most troublesome is the chapter on motor vehicles. India has long opposed any concessions, and imposes import taxes of over 100% on fully assembled vehicles and almost 60% on spare parts. It may be on the point of proposing significant cuts in customs duties on vehicles, but only within definite quotas. Notable progress has also been made in the chapter on wines and spirits: Indian customs duties can be as high as 150%, without excise duties. Here too, India will propose substantial cuts. Duties on wines and cheap alcohols will come down to around 40%, and those on more expensive products will be even lower. Progress has, then, been made, but the EU wants more. Advances have been made, too, on opening up Indian public procurement, at any rate with regard to central government purchases. In addition, the EU, which is asking for 130 designations of origin to be recognised, last year won acceptance by India of some half dozen designations.
Progress has, however, been limited in the area of services, where India promised at least partial liberalisation of its banking and insurance sector and the opening up to competition of consultancy and legal services. A diplomatic source close to the matter says that, before doing anything, the EU is waiting for national law reforms to make the market more accessible to European firms. The mobility of temporary tertiary sector workers also remains a thorny issue.
Agreement also remains to be sealed on medicines. The European Commission which, under pressure from the European pharmaceutical industry, had at one point hoped to obtain full protection for data exclusivity, expects India to confirm its commitment under the terms of the ADPIC agreement at the WTO. This is a very sensitive issue that has been picked up by Médecins Sans Frontières, which accuses the EU of jeopardising access by the world's poorest to generic medicines.
In all, the planned free-trade agreement should bring about a spectacular, though asymmetric, reduction in customs duties: only 91-92% of European goods will be tax-free in India, compared with 95% of Indian goods in the EU, including textiles, a very important sector for India. (EH/transl.rt)