New Delhi: India and the European Union (EU) should finalize their free trade agreement (FTA) talks in the face of an aggressive China pushing forth with a Sino-centric trading system with its “One Belt One Road” (OBOR) infrastructure initiative, Germany’s ambassador to India, Martin Ney said.
With many countries in the world also questioning the system of free trade, India and the EU should “make it a point to speak up for free trade. And look for a free trade agreement,” Ney said at a press conference in New Delhi. Ney’s reference could have been to the US, which under the presidency of Donald Trump, has pulled out of the Trans-Pacific Partnership and has questioned the benefits of globalization and free trade, outlining an “America First” policy and incentives to companies investing more at home—aiming to create jobs in the US.
Underlining the strategic dimension to the India-EU pact—long negotiated by the two sides but yet to near completion—Ney said, “If you want to shape globalization, you do it writing it into treaties as international law...This (the India-EU bilateral FTA) is an instrument by which you shape globalization.”
“If you don’t do it (shape globalization), you leave it to other countries to do it,” he said.
“We just had the OBOR summit in China. OBOR is a top down government approach for a Sino-centred trading system...the initiative of one country,” Ney said, noting that India had not participated in the OBOR conference on 14-15 May in Beijing. The EU had sent representatives to the conference but not signed onto the trade document unveiled by the Chinese at the end of the summit.
“If we—the EU and India have hesitation (on OBOR), it should give us an extra incentive to sit down and resume negotiations on the free trade agreement,” Ney said.
Talks on the Bilateral Trade Investment Agreement (BTIA)—the official title of the free trade pact—started in 2007 but have been marred by flip-flops and disagreements.
The last round of talks was held in 2013 and the discussions have remained deadlocked on issues including tariffs on automobiles and wines and spirits, according to EU trade officials.
Ney said India and the EU should not focus on issues like tariffs and import duties but instead on the larger issues involved.
On India’s recent decision to unilaterally terminate all existing investment treaties with partner countries in place of a model Bilateral Investment Treaty, Ney said: “I would say that I would have preferred that India not terminated this agreement (with Germany).”
The India-EU FTA, China and OBOR could be subjects on the table for discussions between Prime Minister Narendra Modi and German Chancellor Angela Merkel who will meet next week under the aegis of the intergovernmental consultations chaired by Merkel and Modi.
According to Ney, India and Germany are set to ink a series of agreements to further deepen ties in key areas of trade, investment and energy, besides exploring ways to step up defence cooperation Modi’s two-day visit to Berlin beginning Monday.
Ney said both India and the EU had hesitations on the China-centered plan which was unveiled by Chinese President Xi Jinping in 2013 and aims to put billions of dollars in infrastructure projects including railways, ports and power grids across Asia, Africa and Europe.
India, which had been invited to the OBOR meet, has its reservations about the project, given that a strand of it i.e. the China-Pakistan-Economic Corridor (CPEC) cuts through Gilgit and Baltistan areas of Kashmir which India claims are illegally held by Pakistan.
On defence cooperation, he said Germany is ready to conclude a government-to-government (G-to-G) agreement with India in defence procurement, adding it will be discussed by the two sides. “India is a strategic partner for Germany. Of course, we have our export control regimes and they will continue to govern our dealings in export. “India is a strategic partner and providing stability in Asia and there is no reason why G-to-G approach should not make further progress,” he said.
Source: livemint.com