India has asked the European Union to reach an internal consensus on issues
before putting offers on the negotiating table for the proposed comprehensive trade and investment agreement. Talks on the agreement are to start towards the end of June 2007.

The Hindu newspaper quoted an official source as saying that, “Given the diversity of the EU, India wants that they (member countries) should reconcile to a common position on various trade and investment issues before they come up for negotiation”.

India had difficulty negotiating a trade agreement with the 10-nation Association of South East Asian Nations (ASEAN), hence the cautious approach with another large trading block made up of different countries, each with its own agenda.

India and the EU had decided in October last year to sign a trade and investment agreement that would go beyond a traditional Free Trade Agreement (FTA) (see earlier  report ‘EC okays trade talks with India, ASEAN, South Korea’).

A meeting scheduled to take place in the last week of this month will mark the formal launch of official-level negotiations.

At the initial stage, both sides are expected to broadly list items they would like the agreement to cover. The actual list of items on which duties will be reduced to zero is to be exchanged in October.

India would like the agreement to cover 90% of trade, which was 40 billion euros in 2005. In the services agreement, India will press for liberalisation of outsourcing norms and movement of professionals.

Apart from trade in goods and services, the agreement will also deal with non-tariff barriers and lay down rules on issues such as investment and competition.

June 16, 2007