Debates

Monday, 23 March 2009 - Strasbourg

20. An EU-India Free Trade Agreement (short presentation)

  President. – The next item is the report (A6-0131/2009) by Mr Karim, on behalf of the Committee on International Trade, on an EU-India Free Trade Agreement (2008/2135(INI)).

  Syed Kamall (PPE-DE), deputising for the rapporteur. – Mr President, I spend a lot of my time in this Parliament telling people that I am not Mr Karim and that I am, in fact, Mr Kamall. It must be confusing for people to hear Mr Kamall speaking on a Karim report. I am speaking on his behalf as, owing to unforeseen circumstances, he cannot be here tonight, for which he apologises.

His report effectively covers trade in goods, services, investment and intellectual property, and development issues. A joint alternative resolution by the PPE-DE, ALDE and UEN Groups has now been tabled, because it was felt that the original committee decision was the upshot of a rather unrepresentative vote, which left the report with several protectionist clauses intact. The alternative resolution better highlights how important a trading partner India is for the EU and the benefits that the liberalisation of trade can bring to both countries.

The EU and India launched negotiations in June 2007 on what is termed a free trade agreement, but what many would probably more correctly call a preferential trade agreement. The report calls for the conclusion of a comprehensive, ambitious and balanced free trade agreement between the EU and India, which should improve market access to goods and services, covering substantially many areas of trade, and including provisions on regulatory transparency in areas relevant to mutual trade investment, as well as things like sanitary and phytosanitary standards, intellectual property protection, trade facilitation and customs.

The main points of the report indicate that, if you look at trade in goods, India’s average applied tariffs have decreased to levels that are now comparable with other countries in Asia – notably India’s average applied tariff, which is now 14.5% compared to an EU average of 4.1%. It also notes India’s concerns about the implications of REACH, costly certificates for exporting fruit to the EU and costly conformity procedures for the EC mark, and stresses that those issues must be resolved in the preferential trade agreement.

The report also points out that services liberalisation must in no way hinder the right to regulate services, including public services. However, it should also be recognised that quite often the state is unable to provide so-called ‘public’ services, and we should recognise that there is a role for non-state actors – the private sector – in providing essential services to the poor, especially when the state itself cannot do this on its own, quite often owing to a shortfall in income.

Trade in services between the EU and India is relatively unbalanced, with the EU exporting 1.5% of its services to India, while India exports 9.2% of its services to the EU. The report also encourages India to develop appropriate data protection legislation to ensure that, in our trade in services, we can have confidence in the ability of Indian companies to handle large amounts of data, since there are concerns about data protection.

The report also recognises that the investment chapters have often come accompanied by a commitment to liberalising capital movements and renouncing capital controls. So we ask the Commission to refrain from including such clauses, given the importance of capital controls, especially for poorer countries, to mitigate the impact of the financial crisis.

The report goes on to welcome India’s commitment to strong intellectual property protection and to the use of TRIPS flexibilities to meet certain public health obligations. Once again, we should all be aware that too many obligations on public health can often leave citizens in poorer countries unable to access medicines, because there is no incentive for pharmaceutical companies to develop medicines for those countries.

Finally, the report recognises that a substantial development chapter is an essential part of any trade agreement, and that we should ensure trade and foreign direct investment. It also recognises that there is concern, particularly in this House, over issues such as environmental standards and core labour, occupational health and safety legislation. We should also recognise that, in seeking some sort of balance between trade issues and environmental protection, ILO standards etc, the pendulum can often swing too far one way and we end up with these taking precedence over trade and condemning poor countries to even more poverty because we make it difficult for entrepreneurs in those countries to develop capacities.

  Louis Michel, Member of the Commission. – (FR) Mr President, I would like to thank the European Parliament for the keen interest it has shown in our negotiations on a free trade agreement between the European Union and India.

In particular, I am grateful to Mr Kamall and the Committee on International Trade for the excellent work that they, along with the associated Committee on Foreign Affairs and Committee on Development, have done in preparing the report on the EU-India Free Trade Agreement. The exchanges with Parliament have been very comprehensive, and the draft motion for a resolution deals with almost all possible aspects of the negotiations on a free trade agreement between the European Union and India. The opinions expressed are a useful tool for our negotiations on free trade agreements.

When we talk about the European Union-India free trade agreement, it is important to take into account the general context and complexity of our strategic relations with India, including the 1994 Cooperation Agreement and the Joint Action Plan, to mention but two of the major initiatives and dialogues that we have established with India.

We are convinced that it is extremely important to work with India to bring to a successful conclusion negotiations on an ambitious free trade agreement that will allow both parties – the European Union and India – to emerge as winners.

The more ambitious the free trade agreement, the greater the economic benefits that will accrue to each party – the European Union and India. That is one of the main conclusions of the impact and sustainable development study that has been carried out by an independent consultant, in parallel with the negotiations.

The objective of the impact and sustainable development assessment was to analyse the economic, social and environmental impact of the future free trade agreement and to identify any necessary support measures.

The impact and sustainable development assessment is currently in its final phase and should be available in April, in other words, in time to support the negotiations under way.

Allow me to give you a brief progress report on these negotiations. Six negotiating sessions have been held since the launch in June 2007, with the sixth session taking place last week in Delhi, from 17 to 19 March. We are expecting to convene two extra sessions this year, ideally after the Indian elections in April and before the European Union-India Summit in November.

As for the substance of these negotiations, progress has been made on all issues pertaining to the free trade agreement, but much work remains to be done.

More specifically, we have exchanged tariff proposals, we have had good discussions on several key service sectors and we have made progress in discussions on texts in almost all areas of the agreement. However, we are still far from an agreement.

Before concluding, I would like once again to express the Commission’s gratitude to Parliament and to the rapporteur. The Commission eagerly awaits other opportunities for effective cooperation with Parliament.

  President. – The presentation is closed.

The vote will take place on Thursday, 26 March 2009.

Written Statements (Rule 142)

  Kader Arif (PSE), in writing. – (FR) On Wednesday, our Parliament expressed its opinion on the future free trade agreement between the European Union and India. Thanks to the work of the socialists, the text adopted in committee points out the economic and social fragility of India, a country in which 80% of the population lives on less than USD 2 per day. To confront this reality, the Socialist Group in the European Parliament has tabled a number of amendments pointing out that any strengthening of the EU’s trade relations with India should be accompanied by a strict framework, to prevent any liberalisation of public services, to guarantee access to public healthcare and essential medicines, and to protect the interests of the most vulnerable people and sectors. Unsurprisingly, the right in Parliament has formed an alliance to propose a much more liberal text in plenary, calling in particular for the liberalisation of banking, insurance, postal services and public procurement. In Wednesday’s vote, I will be defending the socialist vision of fair and equitable trade and I will oppose any attempt by the right to go back on these principles.

  Rovana Plumb (PSE), in writing. – (RO) The EU’s trade in goods with India has more than doubled in value between 2000 and 2007. Exports rose from EUR 13.7 billion to EUR 29.5 billion, while imports rose from EUR 12.8 billion to EUR 26.3 billion. In 2007 India accounted for 2.4% of EU exports and 1.8% of EU imports, and was the EU’s ninth most important trading partner.

I welcome this report because it calls for the conclusion of a comprehensive, ambitious and balanced Free Trade Agreement (FTA) between the EU and India which will improve market access for goods and services, covering substantially all trade, including provisions on regulatory transparency in areas relevant to mutual trade and investment, as well as conformity standards and assessment, SPS, IPR including enforcement, trade facilitation and customs, public procurement, and trade and competitions, as well as trade and development and the human rights clause as an essential element of the FTA.

I want to stress that the FTA must help:

– achieve growing bilateral benefits for an ever-increasing number of citizens

– achieve the Millennium Development Goals, including those for preventing environmental degradation and observing social standards.

  Bogusław Rogalski (UEN), in writing. – (PL) India is a country of contrasts. Its global image has been influenced by overpopulation, poverty (80% of the Indian population live on less than USD 2 a day) and disease. Recently, progress in the field of economics has helped to turn India into a leading global economy. However, India’s contribution to progress in the fields of medicine, technology and space research is in contrast to the shortages of food and clean water which affect the country.

The EU is India’s biggest foreign investor and trade partner. In 2007, EU investment amounted to 65% of all investment in India. India’s investment in the EU has also risen, many times over, during the last few years. The EU should focus on ensuring a multilateral trade system, based on certain principles, as set out by the WTO, which offers the best opportunities for fair and honest international trade.

However, we should stress the fact that India needs to combat the large-scale problem of hunger in terms of global hunger indicators, India ranks 66th out of 88 countries. India, which is a global nuclear power, has not signed the Nuclear Non-Proliferation Treaty, either. Another worrying issue is the problem of child labour, with children generally having to work in dangerous and unhealthy conditions.

Clauses concerning human rights and democracy should constitute a fundamental part of any free trade agreement signed with India. We must also ensure that social and environmental agreements and standards are respected.