EU seeks political impetus for India trade pact

By Krittivas Mukherjee

NEW DELHI (Reuters) - Indian and European Union leaders meeting this week must provide fresh impetus to stalled talks on a new trade pact, a European Commission diplomat said on Wednesday.

The two sides launched negotiations in 2007 for a free trade agreement (FTA), but progress has been hampered because of differences over intellectual property rights and EU efforts to link trade with climate and India's social sector performance.

"The FTA negotiations are very complex. We have to jump into the cold water of give and take," said Daniele Smadja, the head of the European Commission's delegation to India.

"We have to get into the exchange of concessions. We still have very difficult negotiations before us, so we need inspiration from the leadership." While negotiations for the Doha round of world trade talks drag, India has been inking free trade agreements with the likes of Thailand, South Korea and the ASEAN bloc of Southeast Asian nations.

The EU is among India's biggest trading partners. Indian exports jumped 29 percent from the previous year to $34.5 billion in 2007-8, according to government data, and the proposed pact is expected to help bilateral trade exceed $237 billion by 2015.

An FTA between the EU and India could improve market access for goods and services, covering all trade except for public procurement, which India is reluctant to include in the pact. India is also concerned, among other things, about costly certificates for exporting fruit to the EU and conformity procedures for the EC mark. "We will have to find a way to come to grips with the substance of the negotiations," Smadja said.

She said the one-day India-EU summit on Friday would also discuss the global financial crisis, terrorism and global warming, a key area of negotiations ahead of the December conference in Copenhagen for a global pact to fight climate change.

India, which insists developed countries take deeper carbon emission cuts and fund developing nation's climate actions, has opposed efforts, including by the EU, to remove the distinction between rich and poorer countries.