Year-end is a realistic deadline for sewing up India-EU trade pact talks

Ashwini Phadnis
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Didier Reynders Deputy Prime Minister and Trade Minister of Belgium. – Kamal Narang
Didier Reynders Deputy Prime Minister and Trade Minister of Belgium. – Kamal Narang

Rework India-Belgium tax avoidance pact, says Belgian Deputy PM

Belgium’s Deputy Prime Minister and Trade Minister Didier Reynders feels the European Union (EU)-India Free Trade Agreement (FTA) will not only benefit companies from Belgium but also Europe and India.

He told Business Line that Belgium was interested in a balanced approach – equal access to public procurement as well as eliminating non-tariff barriers in India and the EU.

He also proposed renegotiation of the India-Belgium Double Taxation Avoidance Agreement to not only exchange more information about money laundering but also help sustain investments. Excerpts:

What impact will the India-EU FTA have on India-Belgium trade links?

I am sure it will have a very positive impact. If you look at similar agreements with partners like Korea, you will see an improvement in trade with European countries and the same is true with Belgium.

It is expected that the FTA could be inked by the year end. Is this realistic?

It seems to be a realistic deadline if you look at the comments made by the (chief) negotiators. I must confess that after the different meetings, it was more complicated at the (technical) level of civil servants with many details on the table. I was hoping that it will be possible to give instructions to civil servants to open their minds.

Of course, we have some concerns about the (extent of) opening of the Indian market. We understand that there are also some concerns in India about the European market. But I repeat that (what) we have seen in the European Council is a real will to have an FTA with India.

What are your concerns in the pact?

We need to progress in public procurement and India needs open up its market more in different fields. (The Commerce and Industry Minister) Anand Sharma was saying that it was possible to make progress in these areas. However, we have seen that problems have come up in the technical details.

We have the same kind of requests everywhere in the world. First, there should be a decline in tariffs on goods. There should be a commitment to abolish non-tariff barriers and other administrative barriers. (We are also looking at) better access to public procurement and then some protection for intellectual property rights.

I have proposed that a new business conference be held during the next India-EU Summit in Brussels. We will invite Indian business persons to discuss the future of trade relations and prepare for the next visit to India.

Next visit of whom?

I will return in Spring with some businessmen and different targets. We have experience in the diamond sector and infrastructure and have expanded into port activity.

We will try and get into chemicals and pharmaceutical products, and enhance investment in India in new technologies, life sciences, renewable energy, and urbanisation.

Health care is another area. It is possible to come with experts in design, construction and management of hospitals, both public and private.

Given the Euro Zone crisis, do you feel the EU will have to give more concessions to India in the FTA?

Better expansion of trade is part of the solution, not the problem. We have more concerns about the capacity to organise processes on both sides.

Can you elaborate?

To receive a lot of guarantees from India, say, access to public procurement. If you give more, we will also give more.

If it is possible to abolish non-tariff barriers, it will be the same in EU for Indian companies. The only concern in Europe is to be sure that we have a balanced approach.

I fully understand that India needs to have some tax incomes and tariff. But there should not be a huge difference (in what Indian and EU companies pay).

What kind of difference are you looking at?

It varies from product to product. I repeat, I have listened to comments on both sides and there is a real will for an agreement. On the political side, we need to translate that to the negotiators at the technical level, and show that it is possible to make progress on both sides. I urge civil servants to do the job and deliver at the technical level.

I have put on the table a possible renegotiation of the Double Taxation Avoidance Agreement. I think we need to make progress on that also.

My vision is that if an Indian company comes to Belgium to invest, the shareholder will want to make a profit. Our request is, have more jobs and more activity, but do not take part of the profits made by an investor.

(This article was published on August 5, 2012)
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