Economic Times | 6 Dec, 2010
No India-EU free trade accord during PM’s visit
NEW DELHI: The much-awaited free trade agreement (FTA) between India and the European Union is unlikely to be ready for inking when Prime Minister Manmohan Singh visits Brussels for a summit with the 27-nation bloc Friday, German Ambassador Thomas Matussek said here on Monday.
Matussek said the two sides were still making efforts to resolve differences and conclude negotiations on the accord that is expected to help India’s apparel exporters garner extra orders worth $3 billion from the EU.
The agreement will also help generate 2.5 million jobs in India’s textiles and garments export sectors.
The agreement was expected to be wrapped up before the Dec 10 India-EU summit but could not be finalised because of the differences in some areas.
"The free trade agreement was originally supposed to have been finalised at the Brussels summit. But it is taking a longer time than expected," Matussek told reporters, ahead of Manmohan Singh’s visit to Brussels.
Matussek said the two sides have to make some compromises, otherwise it "will be an assymetric agreement".
The EU is India’s largest trading partner with bilateral trade touching $70 billion last year.
The two sides have already agreed to eliminate tariffs on 90 percent of all tradable goods. But what the two sides are currently discussing is an increase in this figure, with India asking the EU to abolish tariffs on 95 percent of goods, while the EU wants India to offer a tariff-slash on 98 percent of goods.
The key sticking points that remain unresolved include a clause on sustainable development, which seeks to bind India to a range of human rights and environmental commitments. Intellectual property rights is another area where India and the EU have found it tough going to find common ground.
Matussek said the India-EU summit will issue a political declaration for early conclusion of the negotiations.