EU Lamy Expresses Concern Over Trade Issues With India

AP 14mar03

NEW DELHI—The European Union is concerned about India's handling of antidumping investigations and said its import restrictions are a major impediment to European industry.

"This has gone to the point that WTO (World Trade Organization) consultations have unfortunately become unavoidable," European Union Trade Commissioner Pascal Lamy told top representatives of India's industry on Friday.

Indian companies also are not responding to the concerns of European citizens about health and food safety, he said.

"I do hope that after the recent issue of pesticide contamination of mineral water in India, you will understand that addressing the concerns of citizens is essential," he said.

India's Law and Commerce Minister Arun Jaitley appeared at the same event but didn't directly respond to the issues raised by Lamy.

Jaitley referred to social realities in the country where 65% of more than 1 billion people depend on farming for survival.

Jaitley raised concerns about agricultural subsidies of the developed countries. "To what extent can our people compete with high subsidies economies?" he asked.

India also opposes the E.U. proposal to link trade with issues like the environment and labor standards.

During his two-day visit to India that ended Friday, Lamy met India's Finance Minister Jaswant Singh, Agriculture Minister Ajit Singh and Jaitley and discussed E.U.-India trade relations ahead of a World Trade Organization ministerial meeting in Cancun, Mexico in September.

The European Union has been India's largest trade partner accounting for nearly 25% of its exports and imports. The E.U. has also been the second largest contributor to foreign direct investment, comprising nearly 20% of the investment approved.

India and the European Union have set a target of EUR25 billion euros of two-way trade by next year and EUR50 billion by 2008.

Lamy said the E.U. has devised a program to upgrade India's testing laboratories and capabilities.

"The EUR15 million euro Trade and Investment Development Program, together with India's Ministry of Commerce and Industry, will be launched this year to provide for technical assistance and capacity building to enable development of international sanitary ... standards in India for the benefit of its exporters," he said.

Lamy also said the E.U. was under pressure from its liquor industry to take India to task for discriminatory duties and taxes that push the price of imported spirits up by 580%.