EU-India Network on Trade & Development (EINTAD Project)
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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. One idea would be 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 On behalf of the mobility of labour Group, Rajesh Chadha, National Council for Applied Economic Research, India made the presentation. He said that 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? Prof. Alan Winters further pointed out that the topic is very sensitive. 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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