Newsclick discusses with Deepak Nayyar, eminent Economist, India's External Credit Balance Crisis. Nayyar says the situation is serious and we have the seeds of a macro-economic crisis in the external sector. The Current Account Deficit is at a level which is unsustainable. Financing it in the short term is no solution. He says unless there is a beginning to address the fundamentals in the external sector, the situation cannot be remedied. Talking about the export sector, Nayyar says, “ We have killed auto parts exports by entering into Free Trade Agreement with ASEAN and there are serious concerns on the FTA with the European Union.”

Newsclick discusses with Biswajit Dhar, Director General of Research and Information System for Developing Countries, the India – EU Free Trade Agreement and its fall-outs.

Dhar says the agriculture sector is going to be particularly affected by the dumping of highly subsidised agricultural products from the EU. Several sections like the automobile industry and the milk co-operative, Amul, have expressed concerns over the FTA. The entire negotiating process has been non-transparent. Even the Parliament of our country has not been taken into confidence. Addressing concerns like the Current Account Deficit actually get defeated by agreements like these FTAs. Dhar feels such policies will make India more import-dependent.

A major driver of the proliferations of regional and bilateral trade agreements has been the perceived failure of the WTO to govern global trade. This, in large measure, has been a consequence of the intransigence of the powerful trading blocs (the US, EU, Japan, etc) to accommodate the legitimate concerns of developing nations and also because of differences between the EU and the US in some major areas (especially related to agricultural subsidies).

The ongoing India EU FTA has far reaching consequences for the agricultural sector and its production for both the partners. To better understand the scenario, a brief overview of the background is necessary.

The ongoing India EU FTA has far reaching consequences for the agricultural sector and its production for both the partners. To better understand the scenario, a brief overview of the background is necessary.

The difference between the FTAs and the earlier trade talks under the WTO regime is that while the multilateral talks under WTO are relatively open with texts in the public domain, the FTA talks are shrouded in secrecy.

The Free Trade Agreements that India is negotiating has serious implications for Indian agriculture, food and access to medicines and industry. If proper protection is not taken, FTAs through exceptions, it will act as the floor in all trade negotiations, effectively subverting our position in WTO.