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EU-India Summit: BTIA BARGAIN CONTINUES, by Obja Borah Hazarika, 14 Feb, 2012 Print E-mail

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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