India-EU close in on trade pact

BRUSSELS - India and the European Union Friday said they were closing in on a key free trade agreement to be readied by early 2011. But some problems remain in finalising the pact that is expected to ramp up the two-way business volume to 100 billion euros from 77 billion euros presently.

European Commission president Jose Manuel Barroso at a joint press conference with visiting Indian Prime Minister Manmohan Singh said the free trade agreement, also called broad-based investment and trade agreement, could be signed in 2011.

Manmohan Singh nodded in affirmation and said the agreement will fructify in the spring of 2011.

“We are at the last stages of this complex exercise. We have directed our officials to redouble their efforts to reach a conclusion by the spring of 2011. Finalisation of a balanced agreement will bring enormous benefits to both sides,” the prime minister told reporters.

The two sides reviewed the progress of the hectic negotiations in the run up to finalise the deal at the 11th India-EU summit Friday.

Manmohan Singh, Barroso and European Council president Herman Van Rompuy had a meeting on the sidelines of the summit following which the three addressed the joint press conference.

The free trade talks have been on since 2007. The prolonged negotiations have been hit by some stumbling blocks as the EU insists on India sprucing up the fight against global warming and addressing issues of child labour. India has been concerned over EU’s demands related to intellectual property rights.

India has made it clear it would not accept commitments as per the WTO’s strict regime of Trade-Related Aspect of Intellectual Property (TRIPS) as demanded by the EU.

“Nothing in the agreement would limit TRIPs flexibilities concerning access to medicines,” said Indian Secretary of Commerce Rahul Khullar.

However, fast-paced negotiations over the last two months have resolved most of the stumbling blocks, he added.

“More than half of the deal is done. There is what we call endgame negotiations. And all the very, very difficult stuff is left. The difficult stuff requires very, very difficult decisions,” Khullar said.

He said a significant progress has been made in “most areas of the negotiation, and closure has been achieved in several areas”.

Hectic negotiations are underway on easy movement of professionals within India and European Union countries. This is a problem that has been complicated by higher than normal rates of unemployment in Europe following the global recession in 2008-09 and the collapse of economies of some countries in the EU.

He said the issue of seizure of generic drugs at European ports, another huge problem that is causing worries to the Indian pharma industry, although has been delineated from the trade agreement and would be solved separately.

The issue had come into focus two years ago when an Indian generic drug shipment to Latin America was seized in the Netherlands on grounds of violation of European patent laws.

Khullar said the two sides have made progress in trade of goods and services and have agreed that the final outcome should provide real additional market access opportunities to both sides.

Manmohan Singh in reply to a question that the FTA could hurt the interests of Indian farmers and small traders in India, said: “I am confident we will build enough safeguards to protect their essential interests… Finalisation of a balanced agreement will bring enormous benefits to both sides.”