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27 Feb, 2012

India-European Union Free Trade Agreement – The Pitfalls

Ranjan Solomon

The Manmohan Singh government seems bent upon selling out Indian interests so as to satisfy the minority elite to whom liberalization will provide them access to further unparalleled luxuries, and economic access all at the cost of the nearly 800 million who will not be left lagging behind but will suffer huger proportions of deprivation and suffering.

The impending EU-India FTA agreement is one fraught with severe risks. Civil society both in India and the EU are increasingly concerned that the FTA with its current provisions is not the best way forward for development. The impacts on livelihoods will be nothing short of disastrous. Clearly, the agreement will bring gains to European and Indian large business interests. The issues of poverty and unjust economic systems are not central to the negotiations. Worse, the agreement will strip and erode government policy space and, thus, the space for people to define whether there should be such an agreement at all and, if so, on what terms and conditions.

The EU insists that India and the EU are ’equal partners’ in this negotiation. But even a cursory glance at what the agreement is all about contradicts this claim. Unequal partners cannot ever forge equal trade agreements especially when one sees how the proposed agreement makes no reference really to the questions of inequality and injustice in the systems.

A few unfavorable aspects of the proposed agreement include:

1.      Extension and enforcement of Intellectual Property Rights through provisions that go beyond what is required under World Trade Organization agreements.

2.      Further liberalization and deregulation of financial services:

3.      Liberalization of trade in goods.

4.      The abolition of protective tariffs that might trigger surges of cheap imports from the EU.

5.      An acceleration of the entry of major European retail chains.

6.      Further liberalization of investment that would remove important government policy tools that protect and build domestic industries.

7.      Undermining the scope to export restrictions.

Economic issues are often ignored by the common people partly because they feel they can not influence change or because the media does not adequately expose the faulty nature of economic, pro-liberalization policies.

After 20 years of liberalization, it is only right to ask: Who gains? Who loses? The answer is clearly that the few rich have grown richer whilst more people have joined the ranks of the poor and the middle classes are gradually evaporating into the lower income categories.

The two articles we have summarized are critical and important analyses of the EU-India Free Trade agreement now being engineered. Indian activists are not alone in rejecting the agreement. Important and influential actors in Europe are also in protest mode over the agreement.

We need to be informed but equally to join the protests against the neo-colonial-capitalist-liberalization agenda so that we reclaim the rights and dignity that are being eroded by the agreement but equally protect the country from the economic invaders who come pretending that they are our saviours.

India-EU FTA: Where Is Europe’s Trade Agenda Headed?

Kavaljit Singh works for Madhyam, a non-profit organization based in New Delhi, devoted to research and public education on economic and developmental issues. In this article he underscores how “the internal documents of the European Commission (EC) reveal the disgraceful attempts to push for higher levels of commitments in trade in industrial goods and agricultural products, services and investment liberalization, geographical indications and government procurement under the proposed India-EU free trade agreement”. He also exposes the highly unequal conditions that are sought to be imposed on India and India is expected to commit ownership cap of 74% for all sub-sectors.

The internal documents of EC are bound to embarrass the Indian authorities who have stoutly maintained that the economic interests of the domestic producers and service providers would be fully protected under the proposed agreement with the EU. It is of grave concern that the India-EU BTIA negotiations have been marked by a gross absence of transparency and public consultation in India. Singh suggest that ‘given these wide-ranging demands emanating from Europe seeking deeper tariff cuts and services liberalization, it is pertinent for the Indian authorities to organize country-wide consultations with state governments, local bodies, small and medium enterprises, farmers’ groups, community organizations and trade unions on an equal footing before inking such a lop-sided agreement with EU’.

Read full article at: http://www.economonitor.com/blog/2012/02/india-eu-fta-where-is-europes-trade-agenda-headed/

A precondition for India’s progress

Praful Bidwai, a widely known columnist and political commentator, researcher and peace and human-rights activist based in Delhi,analyses troubling aspects of the attempt to bring into force an EU-India Free Trade Agreement. Bidwai underlines that an “FTA between the two vastly dissimilar entities, which falsely treats them as equal, would have further skewed the imbalance in their economic relations, and hurt some of India’s most vulnerable people”.

Highlighting the contradictory interests, he says “Nothing could have had India’s rich salivating at the mouth more copiously than the prospect of luxury products becoming cheaper. And nothing would have pleased the crisis-bound industrial and services sectors of the 27-nation European Union more than greater access to India’s fast-growing market for exotic processed foods, industrial goods and financial services.”

He asks somewhat sarcastically to make his point: Rolls Royce, Mercedes-Benz and BMW cars to get cheaper for Indian millionaires? Premium Scotch whisky brands set to become more “affordable”, with import duty reduction from 150 percent to just 60 percent? More European cheese to enter India as tariffs are lowered while huge dairying subsidies continue at home? Higher profits for European pharmaceuticals manufacturers at India’s expense?

Read full article at: http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=93673&Cat=9