TWN Info Service on WTO and Trade Issues (Mar09/02)
5 March 2009
Third World Network

NGOs call for halt to EFTA-India FTA talks
Published in SUNS #6650 dated 2 March 2009

Geneva, 27 Feb (Kanaga Raja) -- A group of Indian trade unions, peoples' movements and civil society organizations has called for a halt to ongoing negotiations on a free trade agreement between India and the European Free Trade Association (EFTA).

The group voiced deep concerns that this free trade framework will constrain India's policy space and have adverse socioeconomic and environmental impacts.

The call came just as delegations from EFTA nations, composed of Liechtenstein, Iceland, Norway and Switzerland, held a third round of negotiations with India in New Delhi on 23-26 February.

Ironically, while Iceland, as a member of the EFTA, is pushing for liberalising India's banking sector as part of the FTA, it has recently found its banking and financial sector collapse in the current crisis, and the Icelandic banks have found themselves targeted under the UK terrorism laws by the British government in respect of the various UK depositors and their funds. Iceland has also had to approach the IMF for help.

Switzerland, another EFTA member, has had to come to the aid of its own global banks (such as UBS, caught up with toxic assets, and now entangled with the US Internal Revenue Service over rich Americans hiding their assets in Switzerland).

In a statement issued in New Delhi, the group of trade unions, peoples' movements and civil society organizations said that EFTA members have strong interests in far-reaching intellectual property rights (IPR) provisions and liberalisation of services, particularly in the financial sector.

EFTA members also have strong interests in the fishing, energy and telecom sectors and want to substantially increase their investments in these sectors through liberalisation of services, investments and the elimination of tariffs for agricultural and industrial products, including fish products.

The statement was signed by amongst others the New Trade Union Initiative (NTUI); National Forum of Forest People and Forest Workers (NFFPFW); National Working Group on Patent Laws; Focus on the Global South, India; Forum for Biotechnology and Food Security; India FDI Watch; Centre for Trade and Development (CENTAD); Third World Network; Centre for Development Alternatives; Intercultural Resources (ICR); Public Service International (PSI), South Asia; and Indian Social Action Forum (INSAF).

Other signatories include Jayati Ghosh, Jawaharlal Nehru University, New Delhi; Rajindar Sachar, former Chief Justice of Delhi and Sikkim High Courts; SP Shukla, Centre for Policy Analysis (CPA); Narmada Bacholan Andolan / National Alliance of People's Movements; South Asia Network on Dams, Rivers & People (SANDRP); and Asia Pacific Movement for Debt and Development (Jubilee South Asia/Pacific).

The statement by the group said that the EFTA FTA includes provisions for liberalisation of government procurement and the promotion of competition laws. Liberalisation of agriculture is included under the complementary Agreements on Agriculture, which is being negotiated between India and each individual EFTA State.

According to the group, IPR provisions going beyond the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement of the World Trade Organisation force countries to accede to controversial IPR treaties. This has been part of other EFTA FTAs.

The statement noted that India had designed the Plant Varieties Act with an effective system for the protection of farmers and their plant varieties. This Act would need to be amended if the FTA with EFTA is approved, which would reduce policy space and restrict the use of seeds by breeders and farmers, with negative implications for India's food sovereignty and biodiversity.

In health, introduction of data exclusivity would delay the introduction of generic drugs even in the absence of patent protection, said the statement, adding that to ensure access to low-cost quality generic essential medicine, developing countries have included public health safeguards in their patent laws.

"However, many multinational pharmaceutical companies, including the Swiss company, Novartis, have been legally challenging these."

The statement further said that provisions on IPR included in previous EFTA FTAs are targeted towards removing and reducing these public health laws. "Since India is a major exporter of generic drugs, this would have a negative effect for people in need of these medicines around the world."

Noting that previous EFTA FTAs also result in the liberalisation of the financial sector, the group said that this "would reduce India's flexibility to respond to the financial crises, like the one we are currently experiencing."

Stiffer competition through further liberalisation of the banking sector will lead to smaller domestic banks being squeezed out of business. This is of significant concern as these banks give access to credit in rural areas.

The statement observed that big foreign banks have a bias towards wealthy customers, which was recently well captured in a headline in the Swiss press: "Credit Suisse and UBS are after the rich Indians".

The statement also said that the EFTA FTA's chapter on investment includes problematic provisions like "national treatment" for foreign companies compared to local companies and facilitation of payment and transfer of capital out of the country. This "treatment" would give greater privilege to the more powerful EFTA companies.

For instance, the statement added, EFTA companies' expertise in shipping would overwhelm the comparatively weaker Indian shipping and marine sectors.

In previous FTAs, EFTA members included provisions for opening up government procurement (nearly 13% of India's GDP) to its companies. This would seriously undermine India's policy space to support small and medium enterprises, marginalised constituencies and poorer states, by channelling government contracts through local firms in local regions through a variety of measures.

The statement said that this is of serious concern as government procurement remains an important tool to boost domestic production during economic recession.

Other EFTA FTAs have stated that a competition policy should "promote competition in [FTA signatories] economies". This would privilege EFTA-based multinational corporations in the Indian market.

The statement noted that the European negotiators are arguing that many Indian policies are for "the prevention, restriction or distortion of competition", are "anti-competitive" and have to be eliminated. This reduces the flexibility required for India to design laws and policies suitable for its economic priorities and development.

Pointing out that since the announcement of the start of negotiations in January 2008, two rounds of formal talks have taken place, during October 2008 and December 2008, the group complained that both rounds took place "without any public access to the Indian Government's position, commissioned studies and negotiating texts."

The Government is yet to share the details of these negotiations with the Indian Parliament and the people, the statement said.

The statement called for a complete halt to the EFTA-India FTA negotiations until:

-- All existing negotiating positions, draft proposals and government commissioned studies are made public;

-- All current proposals are debated and discussed in parliament and in public;

-- The federal process of consultation with state governments is discussed in each state assembly, and an all party consensus is reached;

-- Consultations are conducted with key constituents such as trade unions, farmers, women, Dalit, Adivasi and other peoples' organisations, small and medium enterprises, cooperatives and hawkers, with at least six months for this public process; and

-- A white paper is released and discussed in parliament on the socioeconomic and environmental impacts of all aspects of the EFTA-India FTA, especially addressing social inequality and discrimination. +