Contentious Issues Of The EU-India FTA Negotiations And Its Implication To China

Nowadays, the development of global economic integration presents a tendency that the amount of regional trade agreements is increasing, with the most common form, free trade agreements. The agreements that came into force are between developed countries, between developing countries, between developed and developing countries, between countries and the existing regional economies, geopolitical alliances or associations, involving more than half of the total trade volume of world. It can be said that these regional trade agreements are already not the exception to the principle, but a trend. However, so far, large developing countries (such as China, Brazil and India) have not signed a free trade agreement with developed countries (economies) such as Europe and America, so the FTA negotiations between India and Europe initiated the beginning of agreement between North and South of big countries.Recently, the EU and India are eyeing a political tool of regional trade agreements to enhance market access for their export products. Both parties had been involved in the free trade negotiation since2007, and once the FTA comes into force, it will become the largest trade agreement that India involves, larger than its previous regional trade agreements which reached with ASEAN. It will also become the first free trade agreement reached by EU with emerging economies.The economic and political gaps between the two economies are bound to make the negotiation process facing difficulties. Based on reading a lot of relevant domestic, foreign literature and government reports, this paper reviewed the trade and economic relationship between EU and India, and then through analyzing the statistic on WTO website and Europe States website, the paper did a comparative analysis on the trade of goods, service and investment between them. Then according to the attitudes and ideas shown by EU and India to the sensitive issues in the previous FTA and WTO negotiations, as well as related government report, this paper concluded five contentious issues that EU and India will be faced with. After that, this paper put forward the implication that this negotiation will put on the future negotiations between developed economies and developing countries and our country’s FTA negotiations. The first part of the paper introduces the background, significance of this paper, domestic and foreign literature review, as well as structural arrangements and innovation and inadequate points. By reviewing a lot of literature, I found that the foreign and domestic scholars mostly focused on certain areas between India and the EU, the amount of literature on the underway trade negotiations is still relatively small.The second part introduces the theoretical frame of this thesis:the free trade area theory, the customs union theory and the theory of inter-industry trade and intra-industry trade.The third part reviews the cooperation between EU and India, then analyzes the situation of trade in goods, trade in services and investment between EU and India, and concludes its position on its counterpart’s market.The forth part is based on attitude that EU and India previously showed to the sensitive issues, the current process of negotiation and the report of the European official website, summed up five contentious issues:trade in services, intellectual property rights, agricultural issues, human rights and labor standards, transparency. India hopes its services sectors could get better access to the EU market, make new progress in the movement of natural persons; in the aspect of intellectual property rights, the EU has always been actively implementing intellectual property protection provisions which beyond the scope of the TRIPS Agreement, while there is a big gap between the extent of intellectual property rights protection between India and EU. The changes in the terms of intellectual property rights will especially affect India’s generic drug industry. The next part analyzes the negotiation of agricultural market. The EU’s common agricultural policy provides local manufacturers a lot of subsidies, having a serious threat to the interests of Indian farmers and dairy producers. The last part has a discussion of human rights and labor standards, transparency with more and more concerns.The fifth part introduces the demonstration effect of EU-India FTA negotiation and its implication to China. The EU-India FTA is the first FTA between large developed economy and large developing country, having a strong demonstration effect for the subsequent free trade negotiation between developed and developing countries. If EU-Indian FTA agreement could be reached successfully, developed and developing countries could largely draw on the experience of this trade negotiations in the future. Our country can also draw a lesson from India’s position on these contentious issues and make a good preparation for future.The sixth part is conclusion, combs the overall idea of the paper and summarizes the major points.The innovations of this paper are that studying the FTA negotiations between developed economy and developing country, concluding the contentious issues in the negotiations, which will always be the main problems that many countries will be faced with in the later negotiations. The disadvantages are that due to insufficient resources about the problems that EU and India encounter, some opinions of the thesis may be just one-sided, hoping that I could play a valuable role in providing a point of view for future scholars.