The Hindu - 4 July 2019
Govt attempts fresh focus on FTAs, talks with U.S., EU and ASEAN negotiators next week
By Suhasini Haidar and T.C.A. Sharad Raghavan
In 2017, PM Modi and the EU leadership had declared they would restart “talks about the talks”, but were unable to break the deadlock, mainly over what baseline will be used to restart the talks.
With fresh focus on resolving its pending talks on trade and dispelling criticism that India has been ‘protectionist’ and held up Free Trade Agreement (FTA) negotiations, the Modi government will engage in three sets of important trade talks: with the European Union (EU), the United States and ASEAN (Association of Southeast Asian Nations) negotiators this week.
On Friday, sources say, the chief negotiators of the EU and the Commerce Ministry will meet in an effort to restart talks on the Bilateral Trade and Investment Agreement (BTIA), which was suspended in 2013, despite several attempts to restart them.
Next Tuesday, a three-member delegation of ASEAN will visit Delhi to discuss taking negotiations on the Regional Comprehensive Economic Partnership (RCEP) to a conclusion by November. Assistant USTR (United States Trade Representative) Christopher Wilson and Deputy Assistant USTR Brendan Lynch will also be in Delhi next week to restart talks as decided by Prime Minister Narendra Modi and U.S. President Donald Trump when they met on the sidelines of the G20 summit last week in Osaka. They will prep for talks between USTR Robert Lightizer and Commerce Minister Piyush Goyal.
“The EU and India maintain regular contacts between their trade officials, including on issues related to a possible FTA,” EU ambassador Tomasz Kozlowski told The Hindu on the informal BTIA talks between the Deputy General for Trade at the European Commission and a joint secretary from the Commerce Ministry.
“They will basically sum up how the situation has changed after the elections, and I think they will find that the ground for restarting [FTA] talks is much more positive,” former Indian Ambassador to the EU and author of book India and EU: An Insider’s View Bhaswati Mukherjee explained.
Meanwhile, RCEP negotiators visiting Delhi, including ASEAN secretary general Lim Jock Hoi, hope to push India into committing to the Asian FTA by the RCEP summit in November. Last year, Mr. Modi had pushed the deadline to 2019, given the elections in four RCEP countries.
“They will make a first-hand assessment of political commitment of the new Modi government to a substantive conclusion of the RCEP agreement by year-end,” said a Ministry of External Affairs official, adding that the ASEAN countries wish to impress a degree of “urgency” on Indian negotiators to complete the deal. Signing the RCEP has been opposed by RSS-affiliated trade unions and industry lobbies worried about the market being flooded by cheaper Chinese goods.
In 2014, the Modi government decided to scrap all its FTA agreements with a view to negotiating new, more equitable ones with various countries, but has yet to close a deal on any one of them as it is accused imposing non tariff barriers on goods and asking for more access for Indian services. Concluding the deals with the EU and RCEP countries would need a slew of changes in India’s current trade regime.
“The government has taken several steps to open up the market, in terms of liberalising the FDI rules, etc. But there is a feeling that there is scope to do more in this regard when it comes to trade with other economies,” a senior official in the Commerce Ministry said.
Election of trade hardliners in the U.S., Europe
On the other hand, the election of trade hardliners in the U.S., Europe and other countries means that there may be less flexibility on the part of the negotiators visiting India next week. President Trump has also regularly repeated his call for India to cut tariffs, while his government is clamping down on professional visas and immigration.
In 2017, Mr. Modi and the EU leadership had declared they would restart “talks about the talks”, but were unable to break the deadlock, mainly over what baseline will be used to restart the negotiations. With elections for the European Parliament and in India over, diplomats suggest that both sides now have a “new political mandate” to take talks forward.
“The EU Parliament has seen more right-wingers who are traditionally hardline on trade, anti-immigration voices being elected, so I would be surprised if they could even give the concessions they have offered in the past,” said Ms. Mukherjee.