‘India-Europe FTA by 2009 end seems unlikely’

Everyday, the two-way trade flow between India and the European Union is 210 million euros. This massive exchange of goods and services makes the European Union India’s biggest partner in trade. But Daniele Smadja, head of the delegation of the European Commission in New Delhi, believes this is much below potential. More of this potential can be realised through the free trade agreement which hopes to liberalise 90% of the trade, she feels. In an interaction with the media, she spoke of various aspects of the treaty negotiations and where they stand.  DNA reports:

What are your expectations on India’s tariff stand?
We hope that India will reduce their tariffs, because there will be products of real interest for the European business community. Cars, for example, can be a very important product. We have not yet started the horse trading or even the real negotiations on tariffs. But we hope that soon we will start on that. While we expect that we need to start soon on the tariff issues and while we expect that we will be at some stage with a balanced result, there would have to be a process of give and take on both sides.

How are the demands of the banking and insurance sector affected by the legislative issues in India?
The content of the FTA in some areas will be a factor of what India believes it is possible to do or not within the context of the current legislation, or in view of future change of regulation. One cannot use, and we do not pretend to use international bilateral negotiations, to force a country to do something on the legislative side. It is clear that we are interested in more market access for our banking industry in India.

Our negotiators will see what can be done so as to have satisfactory results on both sides and then it will depend very much on what India is willing to do, in the context of the current legislation or going beyond it. We will never tell India that it has to change its legislation. In the insurance sector we were watching a bill that had been introduced under the previous session of the government. We are still hopeful on that count.

Do you expect the current deadline for the FTA to be met?
We have never been in favour, in the matter of the FTA or any other negotiation, for setting artificial deadlines. We have always said that we privilege substance over calendars. Last year at the summit, our leaders said that maybe it would be a good thing to try and finish by the end of 2009. Then, because of the elections, there was a long pause as the senior officials could not really make progress because the situation was not right. After the new government is in place and new minister and so on, negotiations are now going to start again. But we have to be realistic. Between now and the end of the year, given all the work that still needs to be done, my honest opinion is that we will not manage.

When could we expect the agreement to be in place?
What we do hope is that the EU-India summit which would take place in Delhi in November will be the occasion to really give a boost to negotiations. Despite the fact that there is very little hope that it can be concluded by the time the year is over, we do hope that we will be able to finish as early as possible by the first half of next year.

How much of an issue could agriculture be for the FTA?
One thing that is refreshing is that, in principle, we should not have any problems in agriculture. On many other FTAs, we have had problems. But given the fact the EU and India are not at all in the same niche in terms of what we produce, agriculture is not going to be an issue.

What kind of progress do you expect to see in the area of intellectual property rights?
India in the past was not very interested in the topic of intellectual property rights, because you did not have to face the problems associated with it. The world has changed and now you are also a victim. So IPR is something that we are working on because now we are on the same side of the fence and we have a lot of interest and negotiations have been progressing smoothly.

What kind of elements could we see on the IPR segment?
Our IPR elements are very-much inspired by the WTO rules. We are not going to invent new international rules for the purpose of bilateral operation. So the better protection of trademarks and other such issues would be the elements of the IPR segment. India would like to protect its Darjeeling and we would like to safeguard our champagne. So there are a lot of similar interests. It is not only an issue of how the legislative framework would work, because a large part of it is already in the WTO. It could extend beyond mere legislation to how the enforcement could work and how the two parties could cooperate.