The Hindu : Business : India, EU FTA talks in Dec.

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Saturday, Nov 18, 2006
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India, EU FTA talks in Dec.

Special Correspondent

`Issue of lowering of duties on wines from EU will be sorted out'

— PHOTO: KAMAL NARANG

`BUILDING BLOCK': European Union Trade Commissioner, Peter Mandelson (right), with Union Minister for Commerce and Industry, Kamal Nath, at a meeting in New Delhi on Friday.

NEW DELHI: India and the European Union will begin negotiations soon for an ambitious and comprehensive bilateral trade and investment agreement though it may take nearly two years for the pact to become a reality.

Disclosing this here on Friday, EU Trade Commissioner Peter Mandelson said talks for the "ambitious and wide ranging'' agreement would be held in mid-December with the EU's Director-General, Trade, who will be arriving here. Subsequently, targets would be set for the next 12 months and then for another 12 months "at the outside.''

On concerns over bilateral free trade agreements, Commerce and Industry Minister Kamal Nath said this was due to "miscarriage'' of the Sri Lanka and Thailand FTAs in the area of agriculture. He felt that this would not occur in the case of the EU which was not seeking market access for agricultural products.

Rationale for pact

Addressing a joint press conference after several hours of deliberations, Mr. Mandelson described the proposed bilateral trade agreeement as a "building block'' for an ambitious World Trade Organization agreement. He said trade flows were doing well but could do better and that was why the two sides were planning to pursure the bilateral trade pact.

On the contentious issue of lowering duties on wines and spirits imported from EU countries, Mr. Kamal Nath said, "I believe we will be able to reach a conclusion", while adding that there were concerns over revenues and reciprocity. Asked whether the EU was planning to file a dispute at the WTO, Mr. Mandelson that before filing a dispute, it was necessary to have a bilateral consultation and even this had not yet been initiated.

However, he stressed that discussions on this issue had been held earlier and would continue later in the day.

Mr. Mandelson also made it clear that the EU supported India's demand for safeguarding the interests of its subsistence farmers in the WTO talks.

It was also seeking joint clarification from the U.S. on how that country's Farm Bill would impact the Doha Round of talks.

Mechanism of SPs

He also gave support on the issue of protecting Indian agriculture through the mechanism of special products (SPs) and pointed out that SPs were designated to ensure the protection of livelihood of subsistence farmers. He said that while U.S. President George Bush was right in seeking market access, Mr. Bush could not expect the developing countries to take highly-subsidised farm products.

Mr. Kamal Nath proposed that the issues of Services and Rules should also be taken up simultaneously during the talks, saying that "there must be parallel movement in all the areas".

The EU Trade Commissioner agreed and said that progress must be made in all the areas simultaneously.

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