Vol.7 No. 1 - 2
January-February
2005
(Excerpts from the address by Mr. Kamal Nath, Minister of Commerce &
Industry, at the "India-EU Strategic Partnership: Steps
Ahead" organised by FICCI in New Delhi on January 14, 2005)
The India-EU relationship started essentially as a partnership for development and economic cooperation. However, it has evolved over the years to a stage where both sides have decided to elevate their engagement to the level of a formal strategic partnership spanning all aspects - political, cultural, social and economic. While the EU is trying to implement its ‘Lisbon Strategy’ to make Europe the world’s most competitive economy, India is committed to banish poverty through economic reform for stimulating growth, investment and employment. While the EU is aiming for revitalizing and sustaining its developed economy, India is striving to become a developed economy within twenty years. These two processes have great synergy, and that is what we need to explore in a strategic relationship.
The EU is today India’s largest trading partner, and with over 30 billion dollars worth of trade, it accounts for 20% of India’s global trade.By contrast, India’s share in the EU’s global trade is a meagre 1%. It is evident that there
is considerable untapped potential in our
business relationship.
However, the EU is also perceived in India as a market that is increasingly becoming more difficult to penetrate. Cumbersome rules, regulations and procedures, ever increasing stringency of standards and frequent use of trade defence instruments are seen as serious non-trade barriers. I am sure, Mr. Mandelson is aware of the fact that India seems to have borne the brunt of the EU’s Trade Defence Actions which affect 3½% of Indian exports to the EU, as against the average global incidence in the EU of only ½%. It is rather odd that a developing country like India should be facing 9 out of the 20 Anti-Subsidy actions in force in EU.
The EU Trade Commissioner Mr. Peter Mandelson meeting the Union Minister for Commerce
and Industry Mr. Kamal Nath in New Delhi on
January 14th, 2005
We would earnestly request Mr. Mandelson to see that the Article 15 of the WTO’s Anti-Dumping Agreement and Article 27 of the WTO’s Anti-Subsidy and Countervailing Duties Agreement are fully operationalised and not left as mere ‘best endeavour’ clauses, with least endeavour to implement them. You have signalled your positive intention on this in Kolkata, and I am thankful to you.
We look forward to the leadership of Mr. Mandelson to see that the development dimension should remain at the heart of the WTO negotiations and that the EU should take a leadership role in resolving the implementation related concerns of the developing countries, in operationalising the S&DT Clauses and in ensuring that principle of “less than full reciprocity” is applied without fail while according concessions to the developing countries.
Textile and Clothing exports contribute over 27% of Indian total exports to the EU. This sector supports over 80 million of our people through direct and indirect employment. We have suffered in the last 2 to 3 years due to arbitrary administration of the GSP Scheme, wherein Zero duty concession on 2500 tariff lines was extended to our competitors. I am confident that Mr. Mandelson would ensure that the sustainable development of over 80 million persons, with the majority having a per capita income very much comparable to those in LDCs, is not once again adversely affected due to arbitrary fixation of graduation criterion for the EU’s new GSP Scheme.
An important aspect of the development of our strategic partnership is our appreciation of each other’s position in the multilateral trading system. India and the EU played a pivotal role in the formulation and adoption of the Framework Agreement last July. While the text reaffirms value and primacy of the multilateral trading system and the importance WTO Members attach to it, substantive work remains. We hope that the Doha Work Programme will now get the necessary impetus and reach early fruition. India needs development space to fulfil its ‘Vision 2020’. Our development imperatives require accommodation of our concerns by the developed countries. We hope that this round will lead to substantial market access in agriculture, non-agriculture products as well as in the key area of services, not just for developed countries into developing countries, but the other way round also! We also hope that it would lead to a more equitable world trading order.