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India, EU formally kick-start trade, investment, food name protection talks

After an intense week at the World Trade Organization headquarters in Geneva, India’s trade minister Piyush Goyal and the European Commission’s executive vice-president Valdis Dombrovskis went on to hold further meetings in Brussels today.

They then formally kick-started long-announced bilateral trade negotiations – showing little signs of exhaustion in a meeting with the press at the very end of a warm Friday in the Belgian capital.

The EU and India announced in May 2021 that they would revive trade negotiations that had  stalled in 2013. Last year they decided to negotiate three separate agreements: one agreement on trade, one on investment, and one on the protection of ‘geographical indications’.

Speaking to the press today, the EU’s Dombrovskis said the two sides aimed to conclude negotiations by the end of 2023. At the same Dombrovskis said “we are aiming for an ambitious and comprehensive trade agreement” – making the end 2023 deadline seem extremely ambitious if the EU’s history of FTA negotiations is anything to go by.

India’s Piyush Goyal for his part said his country was pursuing a “fair, equitable and balanced free trade agreement” with the EU.

Regarding the issue of whether the 2023 deadline might be realistic, Goyal said: “We now have teams in place committed to reaching ambitious timelines, committed to put together a package that is good for both the EU and India.”

On top of the reduction of at times sky-high tariffs on key EU exports applied by India such as on autos or wine and spirits the EU is pursuing ambitions in the area of “ervices and digital trade, intellectual property and public procurement, Dombrovskis explained.

The EU is also seeking “ambitious provisions on sustainable trade and development”, the EU trade chief said.

TSD chapter to be based on coming EU review

The European Commission aims to pursue an approach to its ‘trade and sustainable development chapter’ in its FTA with India that would be based on new principles in this area to be adopted after a lengthy TSD chapter review process later this month.

This would include provisions on climate and other environmental issues, human rights and labour rights. Most importantly it could involve enforcement provisions that could include sanctions for non-compliance – a path the EU has not dared to take thus far in its trade agreements.

India for its part hopes to achieve better access to EU digital and services markets, including for its IT workers. Goyal cited explicitly market access goals for textiles, leather, footwear, metals and mangoes in remarks to the press.

European Parliament wants India to do away with sugar subsidies

The formal announcement came one day after the European Parliament’s international trade committee voted its position on the coming EU India talks. The report, drafted by Geert Bourgeois from the right-of-centre ECR, largely endorses the commission’s approach to the negotiations.

In particular it agrees with the EU executive that negotiations can be pursued despite there not being a formal new mandate by the Council, i.e. EU member states. The commission intends to work on the basis of the mandate agreed ahead of the launch of  the first series of talks in 2007. Some capitals have asked to see an updated mandate.

The international trade committee’s report, which is still to be adopted in plenary, makes two very specific requests that observers might want to keep an eye on.

The first is an explicit demand that India ratify of the core International Labour Organisation convention number 87 on the ‘Freedom of Association and Protection of the Right to Organise’ and convention number 98 on the ‘Right to Organise and Collective Bargaining’.

The second it a demand to negotiate away the sugar subsidies India was indicted for in a recent panel ruling at the WTO in Geneva – a decision India has so far appealed ‘into the void’, given the absence of an Appellate Body in the international trade institution.

The first formal round of EU-India talks is due to be held in New Delhi in the last week of June.

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