Free Trade Agreement talks with U.K. could be delayed to January 2022

Free Trade Agreement talks with U.K. could be delayed to January 2022

Cabinet change in Britain and need for more “pre-negotiation” talks cited as main reasons

Negotiations between India and the U.K. on a comprehensive free trade agreement (FTA) could be delayed to January 2022, with a Cabinet change in the U.K. and the need for more “pre-negotiation” talks being the main reasons for the talks not taking off in November as expected, officials said.

The two sides have also had to shelve a plan for Commerce and Industry Minister Piyush Goyal to meet British Secretary of State for International Trade Anne-Marie Trevelyan on the sidelines of the WTO Ministerial Conference (MC 12) due to begin in Geneva on November 30. Early Saturday, the WTO meet was put off indefinitely due to concerns over the spread of the new “Omicron” variant.

Early Harvest Agreement

The timelines on the FTA negotiation, which included the announcement of an “Early Harvest Agreement” by March 2022, had been decided during a meeting between Mr. Goyal and then U.K. Minister for International Trade Liz Truss on September 14.

However, Ms. Truss was appointed Foreign Secretary and was replaced by Ms. Trevelyan just a day later. In a speech last week, Ms. Trevelyan reaffirmed the two sides were committed to launching trade talks “soon” but did not announce a new date.

“We are aiming to complete pre-negotiation scoping for a free trade agreement (FTA) with India this year and to launch negotiations as soon as possible,” the British High Commission spokesperson said to questions from The Hindu, indicating a delay in the timeline.

The preparatory talks for the FTA, to be held by a number of bilateral working groups (BWGs) that began in September, were due to lead to “joint scoping” discussions in October, that would outline top priorities including the U.K. desire for lower tariffs and market access for British legal firms, and the Indian push for a full services agreement.

The BWGs were due to have set the terms of reference for the launch of negotiations by November 1, according to discussions between the two Governments after PM Modi and PM Johnson announced an Enhanced Trade Partnership plan during their virtual summit in May.

The British HC spokesperson said the U.K. expects to release further details on its “negotiating priorities”, and a full economic assessment of the potential U.K.-India FTA, but wouldn’t comment on reports that suggested that an “early harvest agreement” may be put off altogether.

Another official, who preferred not to be named, indicated that the two sides are now looking for possible dates in January for the launch of talks.

Asked about the status of the negotiations, the Commerce Ministry termed the query as “speculative” and said “negotiations are continuing”. Pointing to the change of guard in the U.K., the Ministry said Mr. Goyal has met Ms. Trevelyan at the G-20 summit where bilateral trade matters were also discussed.

After this meeting on October 12 on the sidelines of a G-20 Trade Ministers meeting in Sorrento, Italy, Mr. Goyal had stressed that “speedy FTA negotiations” would enable the economic partnership to spur economic prosperity in both countries.

A report by the U.K.-India Business Council “Road to a U.K.-India Free Trade Agreement: Enhancing the Partnership and Achieving Self-reliance”, which had been consulted by the British Government ahead of the talks, had flagged India’s Intellectual Property (IP) enforcement regime, gaps in pharma sector regulations, drug price controls, norms related to data localisation and governance.

The Council also flagged the high tariffs like 150% on U.K.-made Scotch Whiskey and the ban on its sales in CSD canteens as causes for concern.

Officials have underlined that despite Brexit, the U.K.’s exit from the European Union, and even in the absence of an FTA, the bilateral trade stands at a “strong” £18 billion or $24 billion, supporting nearly half-a-million jobs.

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