Events & Issues
New Delhi, 14 February 2012
EU-India Summit
BTIA BARGAIN CONTINUES
By Obja Borah Hazarika
Research Scholar, School
of International Studies (JNU)
The cumbersome and somewhat unwieldy set of issues which
found mention in the Joint Statement at the recently-concluded 12th EU-India
Summit portray a sense of absence of targeted and specified goals. The outcome
at the end can neither be seen as a success or a disappointment for India.
The ties between the EU and India have existed since the early
60s. The Joint Political Statement of 1993 and the 1994 Co-operation
Agreement opened the possibilities for a broad political dialogue. A Strategic
Partnership between India
and EU was signed in 2004. In 2005, the Joint Action Plan was
concluded, which served to realize the extent of their potential in areas of
mutual interest. The EU is India’s
largest trading partner and has been the biggest investor in India.
The main bone of contention in the EU-India talks thus far
has been the proposed India-EU free trade agreement or officially known as the
Broad-based Trade and Investment Agreement (BTIA). This, however, was not
concluded at Summit held in Delhi. The non-conclusion of the BTIA could
have partly occurred due to India’s
refusal to accede to the EU’s demand for removing its tariff and nontariff
barriers. It could have also possibly resulted due to disagreements over
matters such as Indian duties on cars and spirits and limited access for India to the
European labour market.
Another important point which could possibly be responsible
for the delay in the conclusion of the BTIA has been the ‘Generic Drug’
manufacture issue. A generic drug is produced and distributed
without patent protection. The manufacturer of the generic drugs saves on
the cost of R&D and creates a drug identical to the innovator drug and is
thus able to sell the drugs at a lower cost. Market competition, then, leads to
even lower prices for the generic products. Until now India has been
producing over two-thirds of all generic medicines, which are largely sold to
poor income countries. It has been stipulated that the India-EU BTIA may affect
the accessibility and affordability of medicines in India as Indian manufacturers will
not be able to continue manufacturing generic drugs if stronger patent laws are
implemented.
The EU-India BTIA is also expected to lead to a loss in
export revenues, a loss in terms of India's trade balance and to
unemployment. It can further skew access to resources like land, in addition to
replacing women from labour intensive process through increased mechanisation.
Also, the EU’s agricultural export-subsidies do not form part of the BTIA
negotiations which means it will lead to India opening its agricultural
sector without safeguards to protect itself from the implications of the EU’s
subsidies. This is especially important in light of the steady rise of farmers’
suicides in the country.
Thus, although the 12th summit did not reach any conclusive
agreement on the BTIA yet the momentum of protests against such a pact has been
gathering. Trading away the lives and health of millions of the poor who
currently avail generic medicines from India will be a blow to the already
skewed Global North-South divide.
The Iranian nuclear programme was also discussed at the Summit whereby the
parties agreed to using “diplomacy to resolve the Iranian nuclear issue…” The
EU and the US
have been vehemently against the Iranian nuclear programme. New
Delhi has been less enthusiastic about slapping further sanctions
on Iran
due to its energy links with the country. The European Council President Herman
Van Rompuy “asked Prime Minister Manmohan Singh to use India's leverage towards
Iran to help bring Tehran back to the negotiating table,” which in essence is
adroit diplomacy given New Delhi’s strong bilateral ties with Tehran.
Additionally, the EU-India joint statement confirmed their
convergence of interests in improving the situations in Syria, Pakistan,
Myanmar, Middle East and Afghanistan. It
took stock of all the EU-India joint ventures ranging from counter-terrorism to
Climate Change to civil aviation etc. The latter ‘took note’ of complaints by
Sikh passengers who face problems at these airports. This apart, the leaders
underlined their commitment to the Doha Development Agenda, the MDG’s, looked
forward to the UN Conference on Sustainable Development (RIO+20) and reaffirmed
their support for disarmament, non-proliferation and a speedy conclusion of the
Fissile Material Cut-off Treaty.
Among these, the Summit
importantly had a Joint Declaration for Enhanced Cooperation on Energy between
the parties, which stated: that the parties ‘will work together to improve
energy security, safety, sustainability, access and energy technologies...’
Besides, another Joint Declaration on Research and Innovation Cooperation was
concluded which outlined that the parties would cooperate to find solutions to
growing societal challenges such as climate change, scare resources,
sustainable transport, etc. There was also an MOU between the European
Commission and the Central Statistics Office to have collaboration between them
in statistics to help create a better informed decision-making process.
The negotiations between the EU and India have not
yet hit a cul-de-sac but the rather long nature of the discussions on the BTIA
point to a partial failure of diplomacy on both sides. With the precarious
conditions of the Eurozone banks, India ought to be wary of the BTIA
or any other economic-related deals it finalizes with the EU. Also, any BTIA
finalized between India
and EU ought to take stock of the socio-economic disparity between the two. The
Indians have a position of ensuring that its generic drug manufacturing ability
is not compromised; although there are voices in India, such as the Confederation of
Indian Industry (CII), who also favour strengthening the IPR laws. This makes
it difficult for the Indian government to reconcile the many demands of the
stake holders in the nation.
The EU drug manufacturers argue that generic manufacturers
in India
prevent them from reaping the benefits of their innovation. However, if
patenting is accepted by New Delhi
then a number of people will be affected. This impasse needs to be resolved but
India
should assertively insist on the continuance of allowing the production of
generic drugs for the poorer sections of the world. Some profits could be given
to the innovator if needed. However, given the large number of people dependent
on Indian generic drugs, the prices ought to be kept at the lowest possible as
the final battle is really over profit versus life.
Given the above backdrop, it is important to understand that
India managed to hold its
ground as a BTIA favourable to the EU and possibly pernicious for India was not
concluded. Also India
did not yield to an anti-Iran stance during the summit. Therefore, the summit
outcome cannot be seen as a disappointment for India.
At the same time, however, the Summit cannot be treated as a
success either as apart from the joint declarations on energy and research and
the MOU on statistics it amounted to nothing but a scheduled exercise in
negotiations which could not deliver any substantial gains for either the EU or
India. With both parties refusing to compromise, the BTIA stalemate continues
and the joint statement merely takes stock of the cooperative endeavors between
the two parties which makes any assessment of tangible gains of this
cooperation extremely indefinable.---INFA
(Copyright, India News and Feature Alliance)
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