The Hindu : India will gain by rise in FDI flows: EU

Online edition of India's National Newspaper
Saturday, Mar 15, 2003

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India will gain by rise in FDI flows: EU

By Sushma Ramachandran

NEW DELHI March 14. The European Union is confident that India is opposing the inclusion of the four Singapore issues on the agenda of the World Trade Organisation's trade negotiations merely on "tactical'' grounds rather than on any substantive objections. It feels that with India having an internationally credible investment and competition regime already, it will actually gain by a rise in foreign direct investment flows.

The visiting EU Trade Commissioner, Pascal Lamy told The Hindu that there were good reasons for seeking to bring the four issues into the Doha Development round of negotiations. In the case of investment and competition specially, the EU felt it would help trade opening benefits to be translated into economics. In the absence of investment or competition legislation, such liberalisation did not translate into FDI or benefit to consumers, he said.

The four Singapore issues cover the linkages of trade with investment, competition policy, transparency in government procurement and trade facilitation measures. It was to block the inclusion of these issues onto the Doha Development Agenda that the former Commerce Minister, Murasoli Maran, had insisted on the need for "explicit consensus'' all WTO members at the last ministerial conference.

On why the WTO should be the forum to take up such issues, Mr. Lamy said this was because the basic principles of transparency, non-discrimination, national treatment and regulatory mechanism for that were the guiding principles of the WTO.

He pointed out that other institutions like the International Monetary Fund (IMF) dealt with the issue of short-term capital flows but FDI did not come into that category and thus needed to be dealt with by the WTO.

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