Innocent Bystanders

Implications of an EU–India Free Trade Agreement for Excluded Countries

image of Innocent Bystanders
The European Union, under its ‘Global Europe’ initiative, has since 2006 been pursuing trade agreements with its major global trading partners. An EU–India Free Trade Agreement is currently under negotiation; if successfully concluded it is likely to have knock-on effects on other countries’ trade with both India and the EU, the trade of the ‘innocent bystanders’ excluded from the agreement.

The authors consider the implications of the EU–India Free Trade Agreement for various groups of other countries, including the ACP countries and those in South Asia, the latter group being most strongly impacted. The analysis considers not only trade in goods but also trade in services, and focuses not only on quantities but also on the prices at which trade is conducted.

The authors then consider how excluded countries might respond to the Free Trade Agreement, both at an individual level and at a systemic level.



Introduction and summary

In October 2006 a European Union-Indian High Level Trade Group agreed the parameters for an ambitious Free Trade Agreement between the EU and India. It was part of the EU’s Global Europe initiative which aimed at setting up agreements with large and rapidly growing markets around the world. On its part, India relished the prospect of preferential access to the major market of the EU, which already took more than a quarter of its exports. The mutual mercantile attractions of the two partners are not hard to see, but there is scope to worry about whether an FTA is the right approach, whether the FTA that actually emerges will be appropriate to the challenges and opportunities that exist and, most importantly for this publication, whether an FTA will harm the many countries which it excludes. This publication deals with the possible impacts of an EU–India Free Trade Agreement on the excluded countries.


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