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.



The coverage of services in FTA

Despite the evidence of barriers and frictions to many dimensions of services trade there is still a question of whether the parties to an EU–India FTA could actually bring themselves to sign a liberalising agreement. The restrictions to trade may have resulted from pressure from interest groups whose interests they promote, but, even if they are the result of historical accident, their very existence can create interest groups designed to maintain them. Thus one must not underestimate the political challenges of tackling service barriers, as, indeed, the EU has discovered in the pursuit of the Single Market.


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