The Best Decision on Pending Free Trade Agreement between India and EU is — Stop it

India EU

A Free Trade Agreement (FTA) between the European Union and India has been discussed for a long time—first from 2007 to 2013 and then, despite the many problems experienced then rendering the negotiations unsuccessful, these negotiations were revived two years ago and more formally these have continued for the last one year since June 2022. However it is clear already that the best decision on this FTA would still be the same as it was in 2013—stop it.

This is stated here from a perspective of promoting genuine friendship, goodwill and cooperation between the people of India and the European Union. Such a relationship can only be created on the basis of real concerns for each other, and more particularly with the historically dominant and powerful side having a more caring attitude towards the weaker side which suffered from the ravages of two centuries of colonial rule. In this FTA negotiation the EU is clearly the stronger side with 17.8% of the world GDP, while India has 3.3%. India has to negotiate with an entity with 27 member countries at various levels of development, which means that lowering tariffs and making other concessions can invite a wide range of higher imports.

The wider context is of the EU in recent times very much following the familiar path of the Global North in terms of rigging trade rules in its favor and against the Global South. The EU and the USA led the way from GATT to the WTO very much with this aggressive attitude, often adopting shrewd,  double-edged language and terminology to further increase the hold of a few rich countries on world trade, particularly in new areas of patents (calling them intellectual property rights), agriculture and government procurement, extending trade rules in such ways as to increasingly erode the newly gained sovereignty of Global South countries many of which had emerged only recently from decades or even centuries of colonial rule. At the WTO the Global North, particularly the EU and the USA, have continued to take aggressive stands against the Global South, and more particularly for the present context, the EU stand on several important issues has been against the stand taken by India.

In such a situation it is hard to visualize a positive role from a people’s perspective for a wide-ranging free trade agreement between India and the European Union. The EU has brought to these negotiations its same previous trends of aggressive pursuit of narrow interests, dressed up in polite and double-meaning jargon, also imparting new meanings to innocent words, whose impact on people of India may be quite different from the literal and commonly understood meaning (words like sustainable and sustainability), the same old colonial story of deceit and doublespeak.

The entire process appears to be driven more with the narrow concerns of certain elites only. As far as the concerns of most farmers, workers, fishers, small entrepreneurs ( including women in all these categories) are concerned, these appear destined to be impacted very adversely by this free trade agreement ( and its accompanying deals regarding GI or geographical indications and investment).

India’s farmers and dairy farmers –and most of them are very small farmers with women making a very important contribution—will certainly suffer a lot from the cutting of import tariffs whose burden will be much heavier for India’s side. The EU farmers are much bigger, have access to more resources and subsidies (apart from the historic legacies of advantages inherited by colonial and imperialist powers). The opportunities for EU exporters of farm produce are much more than any limited possibilities that may exist for India’s exporters due to tariff as well as non-tariff factors and barriers. In addition prospects of seed sovereignty of farmers will be adversely affected, as well as of natural and self-reliant farming and agro-ecology which are linked to seed sovereignty. We cannot forget here that, particularly after the Bayer-Monsanto, deal, giant seed and agro-chemical multinationals, spreading the most baneful influences in the Global South, are heavily concentrated in the EU (along with the USA). The smaller scale food processing will also be adversely affected.

This much is clear enough, although more details will be needed about the negotiations to find out if and to what extent the public distribution system and procurement from farmers will be affected.

In the case of traditional and smaller-scale fishers, they may be adversely affected by not just reduction of import tariffs but in addition the increased possibilities of European trawlers operating in Indian waters.

The EU negotiators are keen to bring in patent provisions which go beyond the existing TRIPS ones, thereby increasing health concerns as the prospects of production of cheaper generic drugs and making them available to patients in India and other countries will be adversely affected. Hence India’s status as a pharmacy providing low price medicines to the world will be harmed.

With respect to government procurement, India’s prospects of using its policies to promote indigenous suppliers, small and medium scale scale suppliers and women self-help group suppliers will be eroded. In the case of digital sector, the grip of European multinational companies will be greatly strengthened and the prospects for independent development of Indian entrepreneurs will be reduced. By facilitating supply of cheaper raw materials and minerals to Europe through possibly removing export taxes and in other ways, this FTA can lead to excessive resource depletion, increase environment ruin and/or increase problems for some Indian small-scale industries (for example leather industry).

Even regarding the limited gains to some employment-intensive industries like garments, this may involve playing off Indian suppliers against some neighboring ones, while the need is for greater solidarity among countries of the Global South.

This FTA will increase inequalities at several levels. At the international level it will increase inequalities by advancing the prospects of richer EU at the cost of India. The prospects of Indian stakeholders taking advantage of free trade agreement are severely constrained by non-tariff factors, standards and related issues. Employment prospects for Indian workers are limited by the less developed European countries having more prospects in the richer European countries.   Within India it will increase inequalities by, by and large, advancing the prospects of a few selected elites at the cost of weaker sections of people.

Certainly this will be resisted by farmers, workers and other adversely affected people of India, including a large number of women.

Hence from the perspective of the people of India and the European Union, it is best to drop and stop the ongoing negotiations of this FTA and to instead consider more sincere and honest ways of enhancing the genuine cooperation and solidarity of the people of both sides, leading to advancing the objectives of justice, equality, environment protection and peace.

Bharat Dogra is Honorary Convener, Campaign to Save Earth Now. His recent books include Planet in Peril, A Day in 2071, Man over Machine, Protecting Earth for Children and Earth without Borders.

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