Free trade agreement between EU and India?

The clean development mechanism (CDM) pilot project, a part of the larger Haryana Community Forestry Project, is the first small scale afforestation project in the world to get certified by the Clean Development Mechanism.

After the World Trade Organisation talks over the Doha Round collapsed and the achievement of a major reform of the international trading system became a distant dream, the European Union introduced a package of talks to negotiate Free Trade Agreements (FTA) with its major trading partners in the developing world.

A cornerstone in this huge effort proved to be the EU talks with India for a FTA. It is easily understood that a FTA with India will have a great impact on EU’s trade relations with other grate developing nations like China and Brazil. In view of this the EU talks with India over a FTA seem to have stuck in the shallow waters of the Sea of China.

In any case this method of concluding bilateral agreements is not providing the best returns from international trade that a developing country could expect. In the WTO framework those countries acting together could have much greater negotiating powers vis-à-vis their developed partners. In reality however it is not the EU to blame for the WTO Doha Round collapse. It was the Americans who quite unexpectedly undermined the talks in the summer of 2009.

From then onwards the US started to negotiate and sign Free Trade Bilateral Agreements starting with their political “friends” in the developing world. In view of this the EU was obliged to do exactly the same. Not to forget that the EU is the largest trading partner in the world.

More on the EU-India negotiations for a FTA in this address: http://trade.ec.europa.eu/doclib/docs/2007/june/tradoc_135101.pdf