Flood-ravaged Pakistan: India opposes EU export concessions

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Flood-ravaged Pakistan: India opposes EU export concessions

BRUSSELS (December 11, 2010) : India will not agree on social or environmental targets as part of an EU trade agreement, and does not support EU plans to help flood-ravaged Pakistan with export concessions, the country's trade minister said. Although the 27-trading bloc places high importance on the targets, India's objections to binding rules on sustainability, tying Indian and EU operators there to strict labour rights and environmental protection, are unlikely to stall the talks.

"There can be no binding commitments on sustainability (in an EU-India trade agreement). Extraneous issues do not fit here," Indian Commerce and Industry Minister Anand Sharma told Reuters in an interview ahead of an EU-India summit on Friday. Herman Van Rompuy, president of the European Council, told journalists he expected a trade deal between India and the EU, its largest trading partner, to be sealed in 2011.

A work around was expected on the sustainability issues. EU efforts to stabilise regions of Pakistan ravaged by floods this year should be through direct aid payments - not through tariff cuts to Pakistani exporters, Sharma said. "We're all for assistance to Pakistan, but let these two issues not be mixed," he said in the interview conducted on Thursday. "These are separate issues."

Negotiations for a free trade pact between the EU and India are in the final stages, Sharma said. Europe hopes such a deal will open India's booming markets to EU banking, telecoms and consumer goods; India hopes it will give exporters and back office service providers access to Europe's half a billion population.

But the 27-nation EU also wants to tie Indian producers and EU operators there to rules ensuring labour rights and guarding against unfettered pollution.

Concerns have been growing among development activists and EU lawmakers that EU demands in closed-door negotiations will extract concessions from India, opening up vulnerable farm, services and retail sectors to harsh foreign competition and forcing price rises for Indian-made generic drugs used in treating HIV and malaria.

A legal battle at the World Trade Organisation over EU seizures of generic drugs shipped from India to Brazil through European ports was likely to end with Europe backing down, Sharma said. Sharma, a 57-year old lawyer and former anti-apartheid activist, also rejected calls by 25 European parliamentarians that India should secure preferences as a developing country, rather than an equal partner in the trade talks.

"We've never claimed we are not a developing country. But India is the fastest-growing economy in the world. If it is not as equal partners there cannot be any negotiations." India is home to global players in the automobile, pharmaceuticals and BackOffice service sectors, and is listed by the World Bank as one of the world's fastest growing economies, although many Indians live in poverty.

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