Indian diplomatic presence in Brussels needs boost

The European Union and India at the recently concluded EU-India Summit (September 29) in Marseille, France failed to finalise the ongoing trade negotiations over Free Trade Agreement (FTA), the two sides remaining at loggerheads on key issues in the Doha talks on liberalising world trade. Political ties can not go far without financial bonds and a look at the trade figures from recent past show that its time to inject much needed momentum into an uninspiring trade relationship.

Reiterating the importance of trade and economic ties, Indian Prime Minister Manmohan Singh told journalists at a joint press conference with French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso: “We have agreed to achieve an annual bilateral trade turnover of 100 billion Euro within the next five years and to work towards the conclusion of the India- EU Broad- Based Trade and Investment Agreement by end-2009.” The 27-nation bloc’s trade with India amounted to just less than 56 billion Euro last year. Earlier, the trade statistics showed a jump from a meagre less than five billion Euro in 1980 to a respectable more than 45 billion Euro in 2006. Although trade with the EU is 20 percent of India’s import-export business, making the EU India’s largest trading partner in 2006, India’s share is only 1.8 percent of total EU trade. In the context of the ongoing negotiations in the EU-India Free Trade Agreement, there are some stumbling blocks that need to be addressed on both sides. According to reliable sources, the major hurdle is in the fields of agriculture which is a protected sector in the EU which earmarks 40 percent of its total budget to this sector where there are subsidies galore.

NO TIME TABLE

In May, Peter Power, spokesperson for EU Trade Commissioner Peter Mandelson had told journalists in Brussels: “I can confirm that we have received the document from India. I can confirm that it is certainly a useful and worthwhile opening bid for negotiations will have to go further and deeper,” lamenting that the time-frame for the talks to conclude is “not solely in our hands.” “We would like to see this particular negotiation making progress as rapidly as possible. I think the opening bid is not bad, but a lot of work remains to be done to have an agreement that would be worthy of support by both sides,” he noted.

“I think at this stage it would be unwise of me to put a timetable, but certainly we should hope to see substantial movement in the next year to 18 months,” added Power. India formally launched negotiations in June 2007 with the EU for a comprehensive FTA aimed at removing barriers across all sectors including investment and services.

The EU has, in recent times, accepted the fact that Indian import tariffs have been substantially reduced but it complains they are still high by international standards. The EU calls it a “complex and non-transparent” system as it points at additional duties, taxes, and charges that are levied on top of the basic customs duties. Pointing to the “non-tariff” barriers, the EU lists quantitative restrictions, mandatory testing, import licensing, certification for a large number of products and a complicated procedural modus operandi as the major speed breakers for a smooth trade relationship.

SLUGGISH INDIAN MISSION

With Indians finding the EU institutions bewildering and complex, India has its own set of complaints, foremost being in recent times the frequent use of anti-dumping duties on its exports including footwear. This is the arena where the diplomatic mission in Brussels is failing Delhi in the Indian government’s renewed efforts to shift into higher gears cooperation in different fields with the European Union. India’s outgoing ambassador to the European Union, Dipak Chatterjee, last month was cited by EuAsiaNews as saying, “I don’t think India has fully woken up to the fact that the EU is more than an economic and trading partner. The EU is trying to build a political identity for itself. I think it will take some time for India to come to understand that.” “But India is realising that the EU is a force to reckon with. There is interest on both sides to develop relations,” he had added. 

All the European journalists attending the Marseille Summit agreed that there was a complete lack of information from the Indian mission in Brussels where the EU is seated.

European journalists pointed to “no press release,” “no media briefing,” “no pertinent information on the Embassy website,” nor a “call back to provide information from the Indian Ambassador’s office in Brussels.”

Add to the fact that with more than a month of arrival in Brussels, the new ambassador is yet to let the Brussels press corps know of his presence through either a press release or otherwise. According to political pundits here, its time for Delhi to rethink the Brussels diplomatic strategy to pump in a new impetus into EU-India relationship.

EU officials lambast Sarkozy’s “ignorance”

Brussels, July 7 - Starting the French Presidency of the European Union at loggerheads with European officials, French President Nicolas Sarkozy got all mixed up when quoting trade figures in international negotiations. Rejecting Sarkozy’s figures on the bloc’s trade negotiations as “utterly incorrect,” Commission spokesman Michael Mann told journalists in Brussels, “This figure of 20 percent (reduction in EU farming output as a result of World Trade Organization talks) that is being talked about in the public domain is utterly incorrect. “It is based on the assumption that we are adopting hook, line and sinker the proposals put on the table by the G20 group of countries, which is not the case and will never be the case,” he said.

During the regular mid-day press briefing, Mann’s views were echoed by Peter Power, spokesman for Trade Commissioner Peter Mandelson. Power told journalists: “We have not agreed to these, we will never agree to the full demands of the G20. We are in discussion, we can agree to some.” If developed and developing countries agree to a compromise on trade - an outcome which is by no means assured - the commission believes that it could lead to a fall of some 1.1 percent in EU agricultural production and 2.5 percent in jobs in the farming sector by the end of 2014, Power said. “(Sarkozy) is basing the figures he has put into the public domain on a false assumption,” he said.

Sarkozy, on the eve of taking over the rotating presidency of the EU, in a televised speech lambasted the EU’s trade policies saying the present policies would result in a 20 percent drop in EU farm output and 100,000 job losses. Sarkozy slammed both Mandelson and the WTO’s French head, Pascal Lamy, for trying to impose such an agreement on Europe, and vowed, “I will not let that happen.”

Commission officials retorted that that would only be the case if the EU caved in to all the demands of the G20 group of developing countries such as China, India, Brazil and South Africa. Moreover, Sarkozy also got flak back from Mandelson, who told the BBC network, “I am being undermined and Europe’s negotiating position in the world trade talks is being weakened and I regret that,” stressing that the mandate on which he was negotiating in the trade talks “had been agreed by all the (EU) member states (Council decision).”

Later, Mandelson was conspicuous by his absence at the gala dinner hosted by the French to inaugurate the rotating EU presidency. Asked to comment on the missing Commissioner, in the presence of the European Commission President Jose Manuel Barroso, Sarkozy told journalists, “It is not forbidden to have differences of opinion in Europe.”

EU confirms FTA with India on a fast-track

The European Union has confirmed that it had received from the Indian government the draft documents pertaining to the ongoing negotiations on a Free Trade Agreement (FTA) with India.

“I can confirm that we have received the document from India. I can confirm that it is certainly a useful and worthwhile opening bid for negotiations will have to go further and deeper,” Peter Power, spokesperson for EU trade commissioner Peter Mandelson told journalists in Brussels.

Replying to a question from New Europe, Power lamented that the time-frame for the talks to conclude is “not solely in our hands.”

“We would like to see this particular negotiation making progress as rapidly as possible. I think the opening bid is not bad, but a lot of work remains to be done to have an agreement that would be worthy of support by both sides,” he noted.

“I think at this stage it would be unwise of me to put a timetable, but certainly we should hope to see substantial movement in the next year to 18 months,” added Power.

India formally launched negotiations in June 2007 with the EU for a comprehensive FTA aimed at removing barriers across all sectors including investment and services.