'India, EU try to solve trade irritants'

By Our Special Correspondent

HYDERABAD, NOV. 24. The general economic climate in the European Union (EU) has slowed down but it is still not in recession. In fact, it is a relatively dynamic market with a positive consumer attitude due to decrease in taxes in many of the European countries, according to Mr. Pascal Lamy, the European Union (EU) Commissioner for Trade.

Speaking to presspersons here on Saturday, Mr. Lamy said EU's growth which slipped to 2.5 per cent last year was projected at 1.5 per cent this year, but a `rebound' was expected in the second or third quarter of 2002. He felt that while U.S. problems might continue till the beginning of 2003, Japan might not be able to make much of a contribution to world economic growth for sometime to come.

Coming to India, he said many investors still viewed it as a `very difficult country' with too much of red-tapism and lack of infrastructure. But the EU and the Indian Government were working on a ``push-pull" strategy to solve trade irritants. The `push' aspect covered issues such as overcoming discriminatory taxation on liquor and spirit, besides steel. The `pull' aspect covered issues such as diagnosis of business problems and finding solutions.

Bilateral trade between EU and India was about $25 billion, but then it was `five times more' with China. `We are not with India where we should be, and India is not with the EU where it should be in terms of trade,' he felt. However, increasing trade with India was an issue that would have to be tackled over a `medium' term. While second generation reforms were well conducted, the `speed of reforms' was in Government's hands. He conceded that reforms of this nature took time to find its way through the complex democratic processes.

Issues such as power sector, telecom, labour and competition, besides streamlining tax system at the federal and State level had been discussed with the Government, he said.

Send this article to Friends by E-Mail

Section  : Business
Previous : Top four enjoy 50 p.c. market share
Next     : FAG forms JV for taper roller bearings