EU, India target free-trade deal in early 2011 (Roundup)

Dec 10, 2010, 12:14 GMT

Brussels - The European Union and India want to conclude a huge free-trade agreement linking some 1.5 billion people together by spring 2011, leaders at a summit in Brussels said Friday.

Current trade flows between the world's largest democracy and its largest economic bloc amount to some 70 billion euros (93 billion dollars). Officials hope that the scrapping of 90 per cent of remaining tariffs would boost that by at least half.

'I am pleased that we have created momentum in the Free Trade Agreement negotiations for an ambitious and balanced conclusion in the spring of 2011. It would be the biggest agreement concluded by the EU and one of the biggest bilateral agreements ever,' said summit host Herman Van Rompuy, the president of the council of EU states.

India's Prime Minister Manmohan Singh said, 'We are at the last stage of this complex exercise, (and) we have directed officials to redouble their efforts to reach a conclusion by early 2011.'

A deal would 'bring enormous benefits to both sides,' and should include enough safeguards to make sure that Indian small farmers and businesses do not lose out, Singh said. Those groups have questioned the proposed deal, saying it could put them out of business.

Ahead of the summit, EU sources said that an agreement in March or April would be the ideal outcome.

However, while the Indian and EU leaders agreed on the need for a deal on trade liberalization, they remained at odds over an EU proposal to help Pakistan recover from its devastating floods by lifting tariffs on certain exports from the country.

EU sources say that some of Pakistan's neighbours, who export the same sort of products, have challenged the initiative in World Trade Organization talks in Geneva.

'We are of course aware that some of our partners, including India, might have questions and concerns about those measures: we are discussing those issues with our partners,' said Jose Manuel Barroso, head of the European Commission, the EU executive.

Commission officials 'are in touch with their Indian counterparts and we will satisfactorily resolve this matter,' Singh said.

The two sides did agree on boosting cooperation in the fight against terrorism, an issue which Van Rompuy described as 'really key.'

In a joint statement, the first on the issue they have ever agreed, the two sides agreed to boost cooperation on issues such as law enforcement, cyber-security and identity checks.

India and the EU 'acknowledge that international terrorism is one of the most serious threats to international peace and security (and) emphasize that the EU and India stand united in combating threats to international peace and security caused by terrorist attacks,' they said.

Barroso said that the summit also gave 'renewed impetus' to questions of cooperation on clean energy and making India's economy more climate-friendly by supporting initiatives such as solar power.

In particular, leaders called for an early deal on research cooperation in the peaceful uses of nuclear energy.

Leaders also discussed issues such as the conflict in Afghanistan and Iran's disputed nuclear programme, reaffirming their 'commitment to diplomacy to resolve the Iranian nuclear issue.'

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