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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.

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Multilateral responses

The message of the previous section is not particularly encouraging: even if the shocks to excluded countries or sectors within them are material, there is not much that excluded country governments can do about them other than adjust and seek help from the offending parties. Their best hope is to negotiate, possibly by making market access concessions of their own, an attenuation of the harm they feel. Multilaterally, the situation is not quite the same.

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