EU’s green rules clash with trade goals as India talks resume
European Union and India will try to advance talks on a trade deal this week as the bloc’s demands for strict sustainability requirements have become a key stumbling block.
European Commission Vice President Valdis Dombrovskis will discuss the proposed pact with Indian commerce minister Piyush Goyal on the sidelines of a Group of 20 trade meeting in India, as both sides seek to diversify their economies away from China.
The EU has a strong interest in sealing the trade deal but the bloc’s sustainability regime is complicating its trade negotiations across a number of countries, people familiar with the matter said. The bloc needs to figure out how to communicate more clearly that green elements in the trade talks are legally required to avoid being labeled as protectionist, the people added.
The EU sees part of its mission as using its economic weight to promote green goals globally, but other countries are often reluctant to make those kind of commitments, which has snagged negotiations on a range of trade deals from South America to Asia.
A free-trade agreement with India — one of the world’s fastest growing economies — would unlock mutual access for goods and investment in key areas such as digital markets, critical raw materials and energy.
“The EU standards are quite high and its approach to FTAs is very technocratic. India is a test case to see whether the EU is able to push its strategic interest,” said Garima Mohan, senior fellow at the German Marshall Fund think tank, adding that India is set to hold a general election next year.
