The ‘mother’ of all deals

WHILE NEITHER COMPROMISED ON ECONOMIC SECURITIES BOTH SIDES WERE DETERMINED TO REACH AGREEMENT

- AMITENDU PALIT

WHAT IS UNIQUE about the India-European Union (EU) free trade agreement (FTA), ostensibly the “mother of all deals”?

It is not just the scale of the deal, which brings around a quarter of the world economy, and the global population respectively, within the bounds of its framework. It is also not the fact that India is offering generous market access in sectors it zealously has protected, such as automobiles, alcoholic beverages, and government procurement. Nor is it the fact that the EU will offer deep market access to several labour-intensive exports from India such as textiles and garments, handicrafts, gems and jewellery, and leather products.

None of the above are good enough to make the FTA the “mother” deal. These concessions have been offered by India and the EU in other FTAs. India has committed to these in its latest FTAs like those with the UK and New Zealand. The EU, on the other hand, as it is, has globally low tariffs on most labour-intensive manufacturing exports. Its other FTAs cover almost all issues that would feature in the India FTA.

The true worth of the FTA is in enabling both India and the EU to enhance their economic securities; individually and collectively. This is clear from the concessions offered and the red lines drawn.