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“Substantial divergences” remain in EU-India trade talks 

The European Union’s and India’s positions still diverge “on the vast majority of key outstanding issues”, according to the European Commission’s report on the most recent round of trade talks in June. 

In an attempt to break the deadlock, the chief negotiators are continuing to participate in the discussions on technical barriers to trade, services and investment, trade in goods, government procurement and trade remedies. 

But a planned call between commission executive vice-president Valdis Dombrovskis and Indian trade minister Piyush Goyal, initially scheduled for today, has been postponed, signalling likely difficulties.  

The chief negotiators’ presence aims to “encourage progress and reduce the list of pending divergences”, according to the commission’s report. 

“Substantial” divergences in several areas 

“Divergences remain substantial” in the trade in goods chapter, with sources close to the talks confirming to Borderlex that the sides “failed to make much progress” during the last round. 

The parties discussed the market access requests for both agriculture and non-agriculture products which was tabled in advance.  

The EU is reportedly demanding market access for electric vehicles, all information communications technologies products, agriculture products and alcoholic beverages. 

Negotiators will continue to exchange views “on their respective offensive and defensive interests” and are expected to provide revised offers at the next round in September.  

The report concedes that “only limited progress was achieved overall” in the ‘technical barriers to trade’ chapter. 

Negotiators will also continue to exchange offers on government procurement as well as discuss the domestic review procedures which could not be agreed in June. 

On trade remedies, despite negotiators focusing on when the bilateral safeguard clause can be activated, “no progress was made towards a common position yet”.  

Similar difficulties are notable in the area of digital trade. Whilst the EU and India agreed in principle the article on paperless trading, “important divergences remain regarding other provisions, notably on data flows and customs duties”. 

The report noted that “important differences” persist in the good regulatory practices chapter regarding the general principles, the scope and public consultations. 

Negotiators were unable to reach agreement on the chapters on subsidies and state-owned enterprises. 

Discussions will also continue in the next round on the energy and raw materials chapter, the chapter on capital movements, payments and transfers, as well as the chapters on exceptions and sanitary and phytosanitary measures.  

Sustainability, carbon border adjustment and services 

 Despite making progress in the trade and sustainable development chapter, “notably on gender equality”, there are “overall divergences that remain substantial”, says the report. 

India is reportedly reluctant to sign up to the EU’s new model ‘trade and sustainable development’ chapter, which includes sanctions as a last resort for breaches of core international labour conventions and the Paris climate agreement. 

In parallel to the trade talks, New Delhi also wants to be consulted on determining the default values in the bloc’s carbon border adjustment mechanism.  

Such default values will apply when importers cannot provide the necessary information pertaining to their emissions. 

India is calling on the EU to ensure that the CBAM does not nullify the benefits from a future trade agreement. 

On services, New Delhi is struggling to adapt to the EU’s longstanding approach on how to structure the negotiations on services. 

Negotiations on the services and investments chapter are clearly still at an early stage. 

“Both sides had constructive discussions on the basis of consolidated chapters on trade in services (covering all four modes of supply) and on the liberalisation of investment (excluding services),” says the report. 

Progress on intellectual property, ROO and dispute settlement  

The report notes that “some progress” was made on intellectual property rights, rules of origin and dispute settlement. 

The EU and India have “better approximated their positions on some provisions” in the intellectual property chapter such as designs, copyright, trademarks and enforcement of IPR, says the report. 

On ROO the two sides agreed the articles on “unit of qualification” and “returned products”.  

“Substantial progress” was made on the dispute settlement chapter where the parties consolidated several articles. 

Yet even here the commission’s round report sounds a note of caution. 

“Overall, more than half of the text is now agreed but significant divergences remain on several policy issues, e.g. transparency,” says the report, referring to the dispute settlement chapter. 

Brussels and New Delhi reached agreement on several elements of the customs and trade facilitation chapter at the June round, but “important gaps remain” in other provisions of the chapter. 

The two sides also made progress on the transparency chapter, “notably in the article on review and appeal”. 

The next negotiation round will take place in New Delhi on 23-27 September. 

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