Lack of transparency is the bane of India-EU free trade pact

The shroud of secrecy enveloping the India-EU free trade agreement (FTA) negotiations has back-fired on the negotiators. Instead of helping the officials close a deal with minimal intervention from “outsiders’’, it has created a mini-chaos.

Newspapers and blogs are filled with stories of India selling out to the European Union in various sectors, all based on leaked documents being circulated online. The industry, led by the auto and dairy sectors, has gone ballistic and is sending out releases emphasising how the FTA would ruin them.

Rising protests

Non-government organisations, consumer groups and legal experts are organising marches and press briefings, alleging that the Government is all set to deprive the poor of cheap medicines by compromising on its patent regime.

With such a cacophony as the backdrop, it was indeed not a surprise to find two diverse items on the India-EU FTA sharing space on the front pages of most newspapers on Friday. While Prime Minister Manmohan Singh promised his German counterpart Angela Merkel that India would work for early conclusion of the proposed FTA, a Parliamentary panel of the Commerce Department that very day cautioned the Government against signing the pact immediately and said it should be debated in Parliament.

The question that comes to mind is why is the Government so keen to go ahead with this FTA when the entire country seems to be against it.

To answer the question, one has to understand what an FTA seeks to do. A free trade pact brings down tariff and non-tariff barriers existing between partner countries to make trade cheaper and easier. A country gains in sectors where it gets more access in the partner country/countries, and loses out in sectors where the other country/countries get more access.

Ideally, India should have taken all sectors into confidence, whether positively or negatively affected, to explain what exactly the country had set out to do.

That would have encouraged sectors like textiles & clothing, leather and footwear, which face steep tariffs in the EU and would definitely benefit from tariff cuts, to vociferously come out in support of the deal.

Professional bodies, too, would have openly supported the pact if they had a clearer idea about how the chances of Indians bagging a job in Europe would improve because of the pact.

A more candid admission on what the country was setting out to offer to competitors in the protected sectors such as automobiles and dairy would have at least kept speculative reports at bay.

The Government could have then argued with conviction and sincerity why it was important for it to do what it was doing and what were the safeguards that were at hand to protect the industry.

The sensitive issue of intellectual property, too, has been handled with callousness by the Government. While the Commerce Minister had assured the country long back that India would not go beyond the commitments made in the international treaty, TRIPS, leaked documents show that the EU is trying to get commitments like international arbitration on patents woven into the agreement.

A complete silence from the Indian Government on the issue has encouraged NGOs to allege that pressure was on to dilute India’s IPR beyond the TRIPs commitments that would make life-saving medicines unaffordable.

It is true that no country can negotiate with its partner in an open forum. But a greater truth is that a democratically elected Government should not keep the essentials of an ambitious trade pact like the India-EU FTA from interest groups affected by it.

If, after informed discussions with stakeholders, people are convinced that despite small losses, the country stands to gain overall in the long run, the protesting voices would lose strength.

However, if the dominant feeling is that a pact is better left unsigned, as the potential gains were lower than the losses, then so be it.

> amiti.sen@thehindu.co.in

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