India and EU relaunch FTA talks, sign connectivity partnership

India and EU relaunch FTA talks, sign connectivity partnership

India and EU also launched comprehensive connectivity partnership.

India and the European Union agreed on Saturday to relaunch free trade negotiations by resuming talks that were suspended in 2013 for the Bilateral Trade and Investment Agreement (BTIA), as Prime Minister Narendra Modi interacted virtually from Delhi with EU chiefs Ursula Von der Leyen and Charles Michel along with 27 European leaders gathered in Porto, Portugal on Saturday.  

The EU-India leaders meeting also discussed Covid recovery plans and vaccine cooperation, adopted a Connectivity Partnership document outlining plans to cooperate on digital and infrastructure projects, and signed the contract for the second tranche of $150 million from the EU for the Pune Metro rail project. 

However, India failed to secure the support of the European leaders for its proposal at the World Trade Organisation at the meeting for patent waivers for Covid vaccine, and government officials they hoped to see the EU continue to debate the issue. 

Briefing the media at the end of the meeting EU Commission President Ursula Von Der Leyen and EU Council President Charles Michel said that a greater imperative at present was for countries to ramp up the production and delivery of Sars-Cov2 vaccines through greater investment. 

“There are different feelings about the [Indian] request from around the world… In the short term many of us think that this may not be the magic solution, but we would like to keep a closer eye and keep discussing the issue,” said Mr. Michel.  Ms. Von Der Leyen said the EU, which was the “pharmacy of the world” and had exported 50% of its production of 400 million vaccine doses to other countries had shown the way forward. India, which is facing vaccine shortages during the current coronavirus crisis has had to halt its export programme for vaccines worldwide. 

When asked about the EU hesitation over supporting the proposal jointly presented by India and South Africa at the WTO, MEA officials pointed that the US had recently changed its stand and now supports the idea of waiving intellectual property rights on vaccines for the duration of the pandemic, and India would therefore watch the “evolving EU position on this”. The support of a major bloc like the EU is crucial to passing the resolution at the WTO by consensus. 

The joint statement issued after the meeting said that India and the EU agreed to work towards a “balanced, ambitious, comprehensive and mutually beneficial trade agreement which would respond to the current challenges,” as well as launch negotiations for a “stand-alone” investment protection agreement and a separate agreement on “geographical indications” pertaining to intellectual property rights. 

Hailing the decision by the leaders to resume trade negotiations for the BTIA as a “remarkable moment”, Ms. Von Der Leyen said the talks that had begun in 2007, and stalled in 2013, will finally be picked up again. The talks had run into trouble over market access issues, and tariffs by India on products like wine, dairy and automotive parts, as well as EU resistance over visas for Indian professionals. In addition, the Modi government’s decision to scrap all Bilateral Investment Treaties (BITs) in 2015 posed hurdles for new EU investments in India. The timing and structure of the relaunched talks would be steered by the recently set up High-Level dialogue between Commerce Minister Piyush Goyal and his counterpart, the EU Trade Commissioner, MEA Secretary (West) Vikas Swarup said. 

The India-EU connectivity partnership signed on Saturday also committed the two sides to working together on digital, energy, transport, people to people connectivity that was “transparent, viable, inclusive, sustainable, comprehensive, with a rules-based approach”. The partnership is seen as a response to China’s Belt and Road Initiative, and comes as the EU’s negotiations with China on their Comprehensive Agreement on Investment (CAI) have run into trouble.  

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