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India makes headway in Lisbon

Y Siva Sankar in Lisbon

"Let us talk football," said a smiling Romano Prodi, European Commission's president and former Italian premier, as newspersons relentlessly posed questions on anti-dumping duties, non-tariff trade barriers, the Kashmir autonomy issue, nuclear proliferation, CTBT, etc, at the first ever Indo-European Union Summit in Lisbon, Portugal.

Indian Prime Minister A B Vajpayee and his Portuguese counterpart and European Council president Antonio Guterres, too, steered clear of grandiose announcements, and made short statements at the joint media conference. These did not seem consistent with the pre-summit hype about ambitious bilateral plans for development and economic co-operation between India and its largest trading partner, the European Union.

The 'task' of injecting some 'life' into the proceedings fell on External Affairs Minister Jaswant Singh and Industry and Commerce Minister Murasoli Maran, both of whom rose to the occasion.

Maran was easily the most excited India dignitary. India and the EU had just formalised a joint declaration, and Maran realised the document could bring much cheer to his commerce ministry in future. For one, the EU has agreed to lift tariff curbs with immediate effect on 3,500 tonnes of India's textile products for 2000-2001. (India had sought the benefit for 5,000 tonnes for the year.) Indian exporters would see glad tidings in this.

The bilateral dispute over 71 other items, however, remains unresolved. Officials said a solution is likely to be worked out within three months. Subject to India and the EU resolving this, the rest of the 8,000 tonnes (the magnitude of India's quota) would be released every year until 2004, when the quota regime ends. (India had signed a Memorandum of Understanding in 1994 and notified to the World Trade Organisation, and revised tariff bindings in 220 lines in the textiles sector. Of these, 163 lines have duty levels below or equal to the EC price data. On 71, duties are 'objectionable'.)

Speaking on the summit sidelines, Maran said there was another important development, this one on the sugar exports front. In his talks with the EC's trade commissioner Pascal Lamy, Maran sought restoration of export quotas to the past level of 25,000 tonnes. Currently, the level stands at 10,000 tonnes. The EU did not grant India's wish fully, nor did it reject it. So, the middle path would see the EU turning to India whenever there is a shortfall in quotas of the ACP countries (ACP = African, Caribbean and Pacific).

Maran said India also contested the EU's decision to end the duty derogation scheme. This entails exports of Indian basmati rice to the tune of 120,000 tonnes and is expected to have implications for small and marginal farmers in India. "We want consultations before they do anything," he said.

Maran sought market access for Indian exporters to the EU, which accounts for 30 per cent of India's exports and imports. However, India's share of the EU market is less than 1.5 per cent. The Indian team attributed this to anti-dumping and anti-subsidy duties and the fact that the EU imposes restrictions on market access on technical grounds whenever Indian exporters rise to healthy levels, especially in textiles, pharma, iron and steel sectors.

According to the EC, India is the most targeted country under its trade defence action. More than 2.5 per cent of imports from India are subjected to non-tariff barriers. The corresponding figure for the EU's global imports is 0.3 per cent.

While Maran thrived on economy-related matters, Jaswant Singh utilised the summit to reiterate India's stance on Pakistan. (He later told newspersons that he does not discuss internal affairs like Kashmir at international fora.) Asked if he is open to talks with Pakistan just as his Pakistani counterpart is, Singh said: "India has always encouraged the process of dialogue and negotiation. The EU did raise the Pakistan issue of talks. But if we have to consider any initiative, Pakistan must first stop its so-called jihad against India." The EC's security advisor Javier Solanas, it is learnt, "appreciates" India's line on nuclear issues and Pakistan-sponsored terrorism.

In the joint declaration, the EU and India resolved to build "a new strategic partnership founded on shared values and aspirations characterised by enhanced and multi-faceted cooperation."

The declaration resolved to boost bilateral and multi-lateral trade, and business links.

India and the EU, the declaration said, recognise the mutual benefit of a substantial increase in two-way flows of investment, technology, expertise and service providers in knowledge-based economy.

The two entities may conclude an agreement on co-operation in science and technology shortly, the declaration hinted. This would formulate the framework for joint research and technological development, and address the challenges of disease, hunger and poverty. It would also seek to bring together entrepreneurs, investors and scientists.

The EU and India agreed to find a constructive negotiation mechanism vis-a-vis agriculture and services. Expeditious implementation of agreement was also emphasised.

They also agreed to jointly eradicate/fight human rights violation, international drug trafficking, drug abuse, chemical, nuclear and biological weapons.

Singh and Chris Patten, the EC's commissioner of external relations, signed an agreement on co-operation in the aviation sector.

The EC will provide Euro 18 million to the project over three years and would encourage closer ties between the Europe's aviation and space industries and regulatory Authorities, and the Indian authorities.

The agreement focuses on seven key areas: airworthiness, airline management, air traffic management, product support, co-operation on technologies for economic success, pilot/instructor training and airport services.

Singh said differences persist between India and the EU on trade issues and these emanate from respective perceptions of the developing and the developed world.

A new bilateral think tank network and a bilateral round table will act as pressure groups to influence the EU's thinking on South Asia. Singh said the Indo-EU partnership is not limited to economy and business but covers the fields of culture, education and society.

Discussions and efforts at evolving a national consensus are on in India over the US proposal to amend the Anti Ballistic Missile Treaty. India is opposed to the militarisation of space, Singh disclosed. Vajpayee said the ensuing monsoon session of Parliament will debate the issue.

The next Indo-EU summit will be held in New Delhi in 2001. It will be preceded by the Indo-EU round table. This official-level dialogue would cover issues like anti-dumping, anti-subsidy investigations and differences on steel exports by India.

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