(Weekly Organ of the Communist Party of India (Marxist)
December 05, 2010
Open Letter on India-EU FTA
GUE/NGL regularly organises study classes on various subjects to
MEPs with the developments taking place across the world. It invites
from different countries to deliver lectures on a range of subjects and
organises interaction sessions with them. In one such study programme,
Yechury, Polit Bureau member of the CPI (M) was invited to deliver a
host of topics have come up for discussion during the course of
including the free trade agreement between EU and
would like to share some of our concerns
regarding the forthcoming EU-India summit which will take place on December 10 and is expected to push the
ongoing FTA negotiations between the EU and
you are aware, civil society both in
While the EU insists that India and the EU are ‘equal partners’ in this negotiation, the reality behind India’s impressive levels of growth, includes following sober characteristics:
the EU trade with
- Estimations suggest that 92 per cent of the Indian workforce find work in the informal sector, the majority of them being employed in the agricultural or in the retail sector.
Demanding reciprocal trade liberalisation and forging equal treatment between unequal partners disregards both the existing economic disparities and special development needs of individual countries. As Stiglitz and Charlton point out, the principle of reciprocity between unequal trade partners is an impediment to fair trade and just distribution of wealth, and an anti-development principle.
We therefore call for the design of EU-India relations that truly reflect the commitments by both parties to sustainable development which includes economic development, poverty eradication, adherence to human and women rights, full and productive employment and decent work for all as well as the protection and preservation of the environment and natural resources.
This would include addressing following imbalances in the current provisions of the FTA negotiations:
- Extension and enforcement of Intellectual Property Rights through provisions that go beyond what is required under World Trade Organisation agreements. TRIPS+ provisions such as data exclusivity, patent extension, and border protection measures would severely affect India’s ability to provide affordable medicines for the treatment of AIDS, malaria and cancer, not only for Indian patients but worldwide; they would contribute to hunger and malnutrition by denying small scale and subsistence farmers’ rights to seeds and sharing of knowledge. This would undermine people’s basic rights to livelihoods, to food and access to healthcare, education and research.
FURTHER LIBERALISATION &
DEREGULATION OF FINANCIAL SERVICES:
The EU is likely to demand the opening of the Indian market for risky financial products and the removal of certain regulations that limit the foreign ownership or size of a bank. This could not only further destabilise the financial system, but also reduces access to banking services and lending in rural areas, for the poor, socially disadvantaged sectors and for agricultural production. Unlike their domestic counterparts, foreign banks are not required to open bank offices in rural areas nor to provide agricultural loans nor to lend to people below the poverty line. Under the FTA, European banks would most likely continue to focus on “class banking” instead of “mass banking”. According to the EU‘s own FTA impact assessment, this could increase the pressure on domestic banks to also “concentrate more on profitable segment of urban and semi-urban markets”. Moreover, financial sector liberalisation would reduce government policy space to respond to financial crises.
TRADE IN GOODS:
abolition of protective tariffs might
trigger surges of cheap imports from the EU, with negative impacts on
employment and working conditions. There are no adequate safeguards
protect vulnerable sectors in case of import surges, even so
of the entry of major European retail chains, which
drive concentration within this sector. This is likely to exacerbate
already negative impacts for the informal sector, which includes
- Further liberalisation of investment would remove important government policy tools that protect and build domestic industries; that foster domestic value-addition and shield vulnerable sectors of society specifically in times of crisis. Provisions on investor protection and on investor-to-state dispute settlement would grant corporations the right to challenge the Indian government and the EU over any regulatory measures that diminishes their returns. This would grant corporations the right to directly challenge the Indian government and the EU at international tribunals in case of a loss of predicted profits. Moreover, liberalising foreign direct investment in land, fisheries and other natural resources will deprive millions of people of access to the resources they depend on for their livelihoods.
Government procurement in
the scope to export restrictions:
Through the FTA, the EU also aims to ban
development chapter in the FTA:
The European Commission repeatedly stated that ‘an ambitious
chapter on sustainable development is an important objective of the EU
bilateral trade negotiations’; and promotion of the four core labour
is a ‘key objective’. It is clear that
lack of transparency,
debate and democratic process
surrounding the negotiations
and the privileged access granted to
business interests must be resolved. Up until now, the trade talks
been conducted behind closed doors, with no negotiating text or
available to the public. Requests for access to meaningful information
parliamentarians, state governments and civil society both in
We wish you a fruitful summit and count on you to address these pressing issues of interest for European and Indian people in your deliberations with your Indian counterparts. In the light of the new role of the European parliament regarding trade issues and the upcoming new mandate for investment protection negotiations we kindly ask you for greater information sharing between the commission and the European parliament. This could for example take the form of a debriefing in the parliament after each negotiation round. We find it necessary that the EU conduct a new impact assessment given that the last one ignored both the implications of the global economic crisis as well as FTA implications for the informal sector. We look forward to discussing the details of the negotiations in different fora.