Event Reports

Need to move on in India-EU relation, says former MEA secretary

Photlabs@ORF
2016
May
07

The EU is among the most important partners of India.  While there is progress on many fronts, some slipback in the situation is evident due to the unresolved issue of the Italian marines, observed Mr M Ganapathi, former Secretary in the Ministry of External Affairs, Government of India.

Initiating a discussion on “PM Modi’s Brussels visit and India-EU relations” at the Chennai Chapter of Observer Research Foundation on April 23, Mr Ganapathi said that the Prime Minister’s bilateral visit to Belgium was taking pace at an awkward moment, following the Brussels bombing.  The Belgian leaders greatly appreciated the fact that despite the awkwardness of the moment, the visit was going ahead as scheduled. The focus of discussions centered on terrorism and the need for joint international action to eliminate this menace.  It was a poignant moment as an Indian, Raghavendran Ganesan from Chennai, had also fallen a victim.  Besides, counter-terrorism measures, the discussions touched upon bilateral economic cooperation. Belgium is India’s second largest trading partner in the EU after Germany.  However, with 80% of the trade turnover consisting of diamond imports into India, the need to move beyond diamonds was emphasised. Belgium supported India’s candidature as a permanent member of the UN Security Council and membership of the four export control regimes.

Mr. Ganapathi noted that EU is India’s leading trade and investment partner and biggest export destination. India and EU are strategic partners. The 12th Summit had taken place in February 2012. Convening the 13th India-EU Summit had, however, faced some roadblocks including scheduling issues, with the case of the Italian Marines looming in the background.  The visit when it finally took place on March 30, was a definite success.  However, there is a need for a pro-active follow up on the various agreed issues.

The 13th Summit helped reinvigorate the partnership between India and the EU and laid down a roadmap for constructive and forward-looking partnership. Seven outcome documents were issued/signed including six Political Declarations and one Financial Contract Agreement.  The documents included the India-EU Joint Statement; India–EU Agenda Action 2020; A Joint Declaration on Counter-terrorism; A Joint Declaration on India-EU Water Partnership; The Joint Declaration on India-EU Clean Energy & Climate Partnership; India-EU Joint Declaration on a Common Agenda for Migration and Mobility and a loan agreement for the first tranche of € 200 million out of total loan of € 450 million for Lucknow Metro Rail Project.

While the Joint Statement outlined the shared perspectives of India and the EU on bilateral, regional and global issues, the India–EU Agenda Action 2020, delineated specific ways in which India and the EU should commit to strengthen cooperation in a wide range of areas over the next five years. With the Summit taking place against the backdrop of the Brussels terrorist act, the Joint Declaration on Counter-terrorism was an important document calling for action to be taken against all entities including States that sponsored or supported terrorism and terrorist groups. Both parties agreed to enhance cooperation in exchange of intelligence and financial flows that aided cross border terrorism. Another key outcome of the Summit was the Joint Declaration on a Common Agenda for Migration and Mobility which provided a framework for exploring efficient grant of visas for bonafide travellers; enhanced mobility for highly skilled workers; and touched on cooperation on social security issues etc.

Elaborating on economic and commercial cooperation, Mr. Ganapathi said that EU was India’s 3rd largest trading partner by region in 2014-15 with total trade at $98.52 billion.  EU was also India’s largest source of FDI.  This brought the issue of the negotiations on the Broad-based Trade and Investment Agreement (BTIA) into sharp focus.  The BTIA was officially launched in 2005 and negotiations commenced in 2007.  15 rounds of negotiations, covering 13 tracks, had taken place thus far. While talks recommenced after the temporary deferral by India due to EU action against GVK Biosciences, unresolved issues still remain.  The EU has sought greater liberalisation of tariffs on automobile, auto components, wines & spirits; en block mention of Geographical Indications pertaining to EU in BTIA; more openness in Government procurements; enhanced FDI in telecom services, multi-brand retail, insurance sector, banking; and liberalisation in legal services, maritime services; opening of accountancy and auditing services, courier/postal services, e-commerce and financial services. India has demanded data adequacy status for Indian IT companies; increased quota for movement of professionals (Mode 4); and relaxation and greater transparency/predictability in Sanitary & Phyto-Sanitary Norms & Technical Trade Barriers (TBT) barriers imposed by EU. Mr Ganapathi noted that the BTIA could have its implications on India’s agricultural sector with several EU countries according liberal agricultural subsidies.  Both sides will have to sit down and arrive at a mutually agreed modus vivendi, keeping each other’s concerns in mind, towards conclusion of this document.

Other important areas of cooperation discussed between India and the EU included Science &Tecnology; Atomic Energy (The Agreement for research & development cooperation in the field of peaceful uses of Nuclear Energy with EURATOM, under negotiation since 2009, is now close to finalisation); and Space.

The Joint Statement recalled the common areas of concern of India and the EU.  The reference to Nepal in the document had raised hackles in Kathmandu.  The no-reference to Myanmar was conspicuous.

Mr. Ganapathi gave a detailed account of the Italian Marines case noting that India had rested its case on strong legal points and also the fact that the IMO did not recognise Vessel Protection Deployments. The Marines on Enrica Lexie had breached more than one regulation.  The issue of the Italian Marines had not only played a detrimental part in the development of bilateral cooperation with Italy but had spilled over onto India-EU arena and into the multilateral area.  Italy had taken a stand against India in several international fora, including voting against India’s entry into the export control regimes (MTCR in October 2015).  With the case moving to the Arbitral Commission of ITLOS, it is no longer a bilateral issue.

Several EU Member States have been supportive of UNSC Reforms and have supported India’s candidature for a permanent seat in the Council. Germany and India were members of the G-4. France and UK were permanent members of the Security Council and have been supportive of UNSC reforms and India’s permanent membership.

Speaking on political developments in the European region, Mr Ganapathi noted that the migrant crisis and Brexit were two immediate challenges facing the EU. While the German Government of Angela Merkel has been accommodative of migrants, some discordant voices have grown louder. This has led to some weakening of Chancellor Merkel’s political position. Some European countries had categorically rejected accepting refugees.

Responding to questions on the June 23 Brexit vote, Mr Ganapathi felt that while the debate in the UK has been shrill with each side making its point strongly, indications are that the result would see Britain staying on in the EU.  The Netherlands referendum rejecting closer EU links with Ukraine was interpreted as a move boosting anti-EU sentiments.  Prime Minister Cameron and a large number of his Ministerial colleagues have been calling for a “Remain” vote, while influential sections of the Conservative Party wants BREXIT supported with the “Leave” option.  British opposition parties have largely spoken in support of Britain staying on in the EU.  Trade in Britain sees sense in Britain within the EU, a move even endorsed by President Barack Obama. From a global perspective, Britain’s exit from the EU could only exacerbate the global economic slowdown.  Only one part of one country, Greenland (Denmark) had voted in 1982 to get out of the EU due to differences on the fisheries issue.

As for EU-Russia relations, Mr Ganapathi opined that there has been considerable strain over the last couple of years.  The EU’s stand against Russia in the recent past has been provocative, leading to a robust reaction from Russia.

This report is prepared by Deepak Vijayaraghavan, Associate, Observer Research Foundation, Chennai Chapter