BHARATIYA Mazdoor Sangh (BMS) demanded the UPA Government to stop negotiations on Free Trade Agreement (FTA) with the European Union forthwith to protect the economic interests of the country. The Government intends to finalise this agreement next month.
In a resolution adopted at the 120th National Executive Committee meeting held in Hubli from September 5 to 7, the BMS also demanded the Government to publish the details of the negotiations and the commitments it is going to make. “Ashok Mitra Report should be implemented in all international negotiations and the Government should immediately issue a White paper on the impact of FTA on various sections of the society. The Government should also constitute an independent commission to review the FTA with BMS participation in it and should convene a meeting with BMS on the impact of FTA on labour and other sectors,” the resolution said.
The resolution said India has been opposing many of the issues in the multilateral talks in WTO whereas it is compromising them in the bilateral talks on FTA. India opposed the Singapore issues in WTO as late as July 2004, but has agreed to incorporate them in the Indo-EU FTA from 2007. Singapore issues like investment, government procurement, competition and trade in goods that have failed in WTO are now being pushed through FTA. Bilateral agreements are much less transparent than multilateral ones. Most of the present Indo-EU FTA clauses are WTO-plus agreements.
The resolution further said that almost all independent studies categorically state that the FTA is beneficial to EU and is detrimental to India in the long run. FTA is supposed to cover 90 per cent of trade between these countries. EU would benefit more as EU is stronger than India in terms of economic and political muscle. The European Commission calculates that by the EU-India FTA, EU exports to India will increase by 57 per cent and Indian exports to the EU by 19 per cent. It shows that the trade surplus would be grossly in favour of the EU.
The proposed FTA will result in large-scale job losses in the unorganised sector. Flood of imports from EU to India will have a devastating effect on the small and medium sector which is the second largest employment sector. Massive cuts in import duties on industrial goods would greatly impact the country’s manufacturing sector that was already facing job losses and shrinking markets. EU wants India to lower duties to zero on 90 per cent of goods within seven years. Our industries like automobiles, plastic items, equipment and machinery are most concerned about tariff cuts. There will be heavy revenue loss or fiscal loss due to tariff reduction. FTA also go against protection of labour and social rights.
(FOC)
