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India-EU FTA unlikely by December

Sujay Mehdudia

Sharp differences persist on various issues including public procurement


Three more rounds of negotiations likely

Deal may be signed in May or June 2011


BRUSSELS: Formal signing of the long negotiated India-European Union Free Trade Agreement is unlikely during Prime Minister Manmohan Singh's visit to Europe in early December. Sharp differences on various issues, including public procurement and the list of sensitive items, are likely to delay the process.

European Commission sources do not share the enthusiasm of India's Commerce and Industry Minister Anand Sharma on the issue. He had recently stated that the bilateral negotiations had been put on the fast track and the treaty was likely to be inked at the India-EU summit on December 9. “We will have the final Ministerial wrap up in November,” he had stated.

However, the European Commission negotiators, after a hectic round of talks with Indian negotiators in New Delhi recently, are clear that the signing of the treaty was not going to take place during Dr. Singh's visit and the EU was not preparing for that. “It is absolutely impossible to work out an agreement in short duration when there are sharp differences on various issues. The signing of the treaty is likely to stretch into early next year and I see the possibility of it being signed sometime in May or June 2011.

The EU has been surprised by the announcement made by Mr. Sharma about the treaty being signed in December,” a European Commission official told The Hindu here.

Indian officials engaged in the negotiations here are also surprised by Mr. Sharma's public posturing and also hold the same view and term as remote the possibility of signing of the FTA treaty. “There are at least three more rounds of negotiations involved during the next two months. Then if both sides agree in principle, the treaty would be sent to the 27-member states of the European Union for their approval. This will take at least six months,” an official said. The European Commission officials associated with the negotiations said the Indian negotiators were still not clear about the mandate for holding talks on the public procurement policy. They also spelt out the differences on both sides on opening of multi-brand retail, non trade issues of child labour and environment, opening of the banking sector, liberalisation of financial sector and various other issues.

However, Indian officials said that it had been made clear to the European Commission negotiators that India would not discuss any non-trade issues like labour and environment which were sought to be linked with trade. India had also made its stand clear on public procurement stating it was untouchable. “The public procurement issue is already clear. India allows import of telecom equipment, power sector equipment and the situation is similar in various other sectors. There is nothing to discuss further. But another round is scheduled in New Delhi and Brussels in November and hopefully both sides will narrow down their differences by that time, it is hoped,” the Indian official said.

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