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13th Aug 2022

Concerns remain as EU and India push for trade deal

Senior EU and Indian officials have called for a free trade deal to be completed by 2010, but India remains resolutely opposed to EU efforts to broaden the agreement.

Meeting in New Delhi on Friday (6 November) for the 10th summit between the two sides, Indian trade minister Anand Sharma made it clear that any deal should stick strictly to trade issues.

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  • Kashmiri sunset (Photo: Kashmiri Overseas Association)

But the EU wants the sensitive topics of India's environmental performance, intellectual property rights and child labour to be part of the agreement that has been under discussion since 2007.

Swedish trade minister Ewa Bjorling, whose country currently holds the EU presidency, said "a lot of work needs to be done" to finalise a free-trade accord.

The two sides have set an ambitious target of more than doubling their bilateral trade to roughly €150 billion in the next four years if a free-trade deal is concluded.

Slow progress in the Doha multilateral trade talks has seen the EU increasingly push for bilateral trade agreements in recent years, with the European Commission clinching an important deal with South Korea last month.

Thorny issues

EU negotiators are keen that any agreement between the two sides should contribute to the global fight against carbon emissions.

Trade commissioner Catherine Ashton said it was vital "to make sure that everything we do supports our ambitions on the environment," while Swedish Prime Minister Fredrik Reinfeldt warned on the dangers of failing to reach a global agreement in Copenhagen in December.

He said India was already feeling the consequences of climate change, such as unpredictable rain levels leading to both underperforming crops and severe flooding.

India however has so far resisted binding emissions targets.

A potentially thornier issue is the EU's demand that India accept strict standards on intellectual property rights that go beyond those agreed at the World Trade Organisation.

Tough EU bargaining on the subject has repeatedly attracted criticism from development NGOs during other bilateral free trade discussions, with activists saying the terms inevitably favour big business over benefits for poorer citizens.

Pharmaceuticals

One Indian sector that would be badly hit by tougher intellectual property rights is the country's pharmaceutical industry, currently a major producer of generic drugs for the world market.

The two sides have already clashed on the issue, with Mr Sharma separately warning the EU on Friday over its recent decision to stop several consignments of generic drugs at the EU border.

EU authorities say the generic drugs, including several medicines to combat swine flu, violate patents.

Mr Sharma said a major issue for trade and intellectual property policy was how to reconcile the provision of affordable medicine to people in poor countries with the need to encourage medical research through patent protection.

EU and India officials will meet later this month in an attempt to resolve the issue.

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