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Report of the Scoping Workshop on EU-India Network on Trade and
Development, Brussels, 21-22nd May 2002
CUTS Centre for International Trade, Economics & Environment
(CUTS-CITEE), India in association with the European Institute for
Asian Studies (EIAS), Brussels, organised a two-day scoping
workshop on EU-India network on trade and development at Brussels
on 21-22nd May 2002. The meeting attracted participants
from both European Union and India, which included government
officials, academicians, journalists and civil society members.
One of the main objectives of this network is to do joint research
and feed the outputs to trade negotiators well before the next WTO
Ministerial Conference. The fifth WTO Ministerial Conference will
be held at Cancun, Mexico, on 10-14 September 2003.
Pascal Lamy, the EU Trade Commissioner, addressed the inaugural session,
which was followed by presentations by individual researchers. The
five topics selected for research are: mobility of labour,
anti-dumping, textiles & clothing, competition policy and
investment. The day two started with group discussions, followed
by group feedback and discussions.
Proceedings
of Day1
Inaugural Session
The workshop
started with a welcome by CUTS Secretary General Mr. Pradeep S
Mehta. He stressed the need for coherent and cogent research on
topics, which are the cause of heated debates both inside and
outside the WTO. The research topics are aimed at multilateral
context rather than bilateral issues concerning the EU and India.
Initially, the network will take up following five issues for
joint research: mobility of labour, anti-dumping, textiles &
clothing, competition policy and investment. He further emphasized
that this EU-India network will encourage continued collaboration
between the Indian and European research communities.
Pascal Lamy, in
his speech praised the effort to initiate an independent network
for research and dialogue between EU and India, which would
provide extremely useful inputs to the policy debate. He stressed
the need for more informal networking, especially among civil
society. He appreciated the inclusion of contentious issues like
investment and competition in the research agenda. He said that it
takes a “real political courage”.
Expressing his
views on anti-dumping, he said that it is no more a trade remedy
measure, being used by only developed countries. Now it is being
increasingly used by developing countries like India as well. He
further stressed that there is a need for better market access in
some sectors like textiles & clothing.
Replying to a
query raised by one of the participants, Mr. R. P. Agarwal, Deputy
Chief of Mission, Embassy of India, Brussels, on the issue of
preferential market access to Pakistan in textiles & clothing,
he said that sometimes one has to take political considerations
into account too. Politics inevitably has an important influence
on trade policy and no way the two can be disassociated.
Prof. L. A.
Winters, from the University of Sussex, UK, the lead European
institution for this EU-India network, pointed out the growing
importance of academics and civil society in shaping trade policy.
He explained that the research areas covered long-running
challenges as well as newer issues brought to the fore by the WTO
Doha Ministerial Declaration through which developed and
developing countries both have a potential to benefit.
Session1: Issues on the Table
In this session the five researchers, who had prepared
research questionnaires for the meeting, presented the same before
the participants. They were Prof. L. Alan Winters (Mobility of
Labour), Natalie McNellis (Anti-dumping), Peter Holmes
(Competition), Samar Verma (Textiles & Clothing), and Nagesh
Kumar (Investment). These questionnaires were sent to the
participants in advance.
Each presentation was followed by discussions, in
which researchers got the feedback. They were asked to revise
their questionnaires, based on the initial feedback, before the
group discussion on the next day.
Proceedings of Day 2
The day two started with group discussions.
The participants split in five groups as per their research
interests. The results of group discussion formed the basis of
discussion in the next session.
Session 2: Group Feedback and
Discussions
The
purpose of this session was for the research groups to present the
results of their deliberations and to get input on these results
from the larger network as a whole. Each group made a short
presentation after which discussions followed.
Investment
Dr. Nagesh Kumar,
Research and Information System, India, was the first speaker on
behalf of the Investment group. The group had identified several
areas for research with regard to a possible WTO agreement on
investment, including the relation between state sovereignty and
investment; an analogue with tariffs in the area of investment;
development dimensions; and regional trade agreements and
investments.
Prof. T.N.
Srinivasan, Yale University, USA, argued that, first it needs to
be debated whether a multilateral agreement is necessary at all.
If it is desirable then the next step is what goes in it. Carlo
Pettinato, DG-Trade, European Commission, remarked that over half of all FDI is already
covered by GATS.
Mr. Agarwal wanted
to know how a multilateral agreement would lead to an increase in
the inflow of FDI into developing countries. He emphasised the
Indian government’s position against a multilateral investment
agreement, as there are already over 1500 bilateral agreements
covering investments (BITs). So it is better that it should be
left alone. T.C.A. Srinivas Raghavan, Asian Institute of Transport
Development, New Delhi,
counter pointed by stating that since over thirty seven percent of
Indian investments are done abroad, a multilateral treaty could
also benefit India. Prof. Srinivasan added that this is the time
to go beyond long held positions.
David Brown, DFID,
London suggested to look at it bilaterally. Both India and the EU need to
improve on trade and investment and the two are closely linked.
Mr. Mehta proposed that
the investment group could do a survey with governments and
businesses, as well as a literature survey on the impact of BITs
on a multilateral agreement. Dr. Kumar rounded up by stating that
the research would first build up the argument on whether there
was really a need for an agreement (literature survey) and then
proceed (if the answer is yes) by finding out what should go into
such an agreement.
Competition
The next presentation was made by Peter
Holmes, University of Sussex, UK, on behalf of the Competition
Group. The group has agreed to write a paper, which would first
address the diverging positions of India and the EU regarding a
multilateral competition agreement and where these are coming
from. It would then look at what shape such an agreement could
take. There are three models available: (1) soft law; (2) TRIPs;
and (3) GATS. The idea is to follow a GATS style conceptual
framework and then once a commitment is made a country would be
subject to a TRIPs style obligation. The next question was
therefore what should be in these obligations. How would
extra-territorial application or dispute settlement be addressed?
Prof. T.C.A. Anant,
Delhi School of Economics, India,
added that the question was how to ensure the flexibility of
the Doha Declaration. Prof. Srinivasan thought that it was better
to identify anti-competitive behaviour and come up with a good
framework to tackle this. Prof. Anant responded that rather than
harmonising competition law it is about the design of law and that
the outlined approach would serve this purpose well. Mr. Agarwal
brought up the problem of ‘export cartels’ and of information
sharing to the floor. Dr. James Mathis, University of Amsterdam,
The Netherlands, made it clear that the GATS idea is new and Prof.
L. Alan Winters suggested that the group should also take account
of the United States’ position.
Textiles & Clothing
Dr. Samar Verma,
Indian Council for Research on International Economic Relations,
India, spoke on behalf of the Textiles & Clothing Group stating that
the focus of the research would be what happens after the end of
the Multi-fibre arrangements (MFA) in 2005 and what are its
impacts. Specific research topics would be what should be
India’s positions if the quotas are extended (i.e. MFA is
continued); what are the impacts of RTAs on textiles; and what is
the likelihood of the threat of OPT to non OPT members? Prof.
Srinivasan said that the continuation of MFA should not even be
entertained and Mr. Agrawal added that therefore no research is
needed on this question. Mr. Mehta suggested dividing the research
into long and short-term research. Dr. Peter Nunnenkamp, Kiel
Institute for Economics brought to the attention of the network
that a lot has happened within individual EU member nations. So
therefore it would be worthwhile to look at the differences within
the EU.
Anti-dumping
On behalf of the
anti-dumping Group, Natalie McNellis, Stibbe, Brussels,
said that anti-dumping differed from the other issues in the
sense that a multilateral agreement already exists. She stated
that they would look at anti-dumping and subsidies together.
Research topics could include finding out what would happen if the
de minimis threshold is
increased; and what has been the effect of anti-dumping measures
on an industry, which suffered injury because of dumping of goods.
Peter Holmes suggested they also look at the displacement of
domestic products. Mr. Mehta stressed the importance of public
interest intervention and the role of consumer organisations in
anti-dumping cases. Sharad Bhansali, Strategic Law Group, New
Delhi, pointed out the
difficulties with data collection due to the fact that
anti-dumping deals with specific products.
Mobility of Labour
With regard to Mobility of Labour Prof.
Alan Winters pointed out that the topic is very sensitive. The
group had identified two research topics in the short term. They
are to find data for Mode 4 of service supply under GATS and to
look at trade in health services with different skill levels. In
the longer run they would also look into the number of persons
that are on the move; what are the misuses; and quantitative
restrictions? Srinivas Raghavan suggested the group also addresses
what are the impacts of importing patients, rather than exporting
doctors with regard to trade in health services. Anant pointed out
the link between Modes 3 and 4 of service supply. People don’t
move on their own and movement is linked with commercial presence.
Mr. Agarwal made clear that a solution also has to be found on
‘social payments’.
Closing Session
The
session was opened by Prof. L. Alan Winters, who welcomed Mr.
Pierre Defraigne, Head of Cabinet of Pascal Lamy and invited him
to take the floor. Mr. Defraigne took the opportunity to express
the importance of listening to the conclusion of the workshop for
the European Commission. As India is an important partner of the
European Union, the Commission is looking forward to both the
results of the EU-India Network on Trade and Development, as well
as the process through which the network will work together.
After
Mr. Defraigne’s address, Prof. Winters stressed the importance
of the research methodology to the participants. As the working
group only has nine months in the short term, the research must be
focused. He went on to express the hope that the network will work
through cooperation.
Pradeep
S. Mehta said that it is the do-how that is the most important. He went on
to say that one extremely important output of this project would
be the inputs we can make to the policy-makers for the Fifth
Ministerial that will be held in Cancun in September 2003.
Therefore we should deliver the final products in June 2003 and
have a review meeting in May. Nevertheless, the Ministerial will
not be the end, but rather the beginning. Mehta set out the
timetable and announced that an interim meeting will be held in
Jaipur, India in December 2002.
He continued by disclosing the various budget lines that were
available for the project. He promised the different groups that
back-up would be provided by CUTS from Jaipur and emphasised the
need for the research to stay specific and focused, despite the
temptation of broadening the research fields, as well as that each
group should consist of at least one Indian researcher/institution
and one EU researcher/institution.
Dr.
Suman Bery, National Council for Applied Economic Research, India,
asked how the quality of the research would be assured considering
the short time-period and therefore wanted to know whether the
interim meeting in December would be a peer review. He also wanted
to know whether it was legitimate to bring in trade and poverty
into the research. Professor Winters answered that trade and
poverty eradication was legitimate and indeed the goal we should
be working towards in the long run. However, given the time
constraints and the fact that the subject does not have any hooks,
which we could grab on to, the network could not take it as a
separate subject. Rather, the development angle would be discussed
in all groups. This view was shared by Prof. Srinivasan, who added
that all groups should motivate in what way liberalisation would
impact on poverty.
Prof.
Srinivasan suggested moving up the timeline even further since
work on the subjects at the WTO would start even before Cancun.
Pradeep Mehta mentioned with regard to quality assurance, that
apart from the December meeting, which would indeed be a peer
review meeting, a management team was set up. With regard to the
timeline it was agreed, after some discussion regarding the right
balance between time and quality, that each group should have a
document ready by the December meeting. Pierre Defraigne added
that although quality is pivotal, timing is very important and
felt that the document should be available before the Christmas
holiday, in order to influence policy makers.
Max
van der Sleen, Netherlands Economic Institute, The Netherlands,
offered his institute as a partner in the network. The offer
was readily appreciated and accepted.
The
session was closed by Mr. Mehta, who presented the steering
committee comprising T.N. Srinivasan (Chair), T.C.A. Srinivas
Raghavan, Peter Nunnenkamp, Malcolm Subhan, L. Alan Winters and
Pradeep S. Mehta. Mr. Mehta thanked the participants and hoped the
network would be successful.
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