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India not exploiting fully EU GSP sops

By Our Special Correspondent

CHENNAI JUNE 20 . The issues of EU's contingency measures against Indian cotton bed linen (anti-dumping duty ruled illegal by the WTO and current moves for EU countervailing duty) and grant of special GSP (generalised system of preferences) concessions to Pakistan for its role in containing drug trafficking to the displeasure of Indian exporters "are polluting our trade relationships'' and should be solved, Stefano Gatto, Head (Trade and Economic Affairs) of the European Union Delegation in New Delhi.

Participating in a Round Table discussion organised by the Federation of Indian Export Organisations-Southern Region (FIEO-SR) on "Doing Business with the EU,'' Mr Gatto, however, pointed out that India was exploiting only 70 per cent of the potential offered by the EU GSP concessions.

Explaining how the EU's trade policy and laws enforced by the European Commission prevailed over laws of the 15 member-States in matters of international trade, Mr. Gatto advised Indian exporters to cooperate, in their own interest, with EU investigation of complaints of dumping by them. If they did not cooperate by allowing inspections and providing required data, they only risked levy of anti-dumping duty even if there was no dumping by them and their prices were really based on market competitiveness. There was no point later in complaining about unjustified levy of anti-dumping duties.

He said India and the EU had decided to give priority to three issues in their bilateral discussions later this year, namely, implications of the EU enlargement (with ten more countries joining in 2004) for India-EU trade, potential for cooperation in information technology (IT) and IT-enabled services (ITES) and Doha Development Agenda. While both countries wanted traditional exports strengthened, they were keen on diversification of the export basket based on studies on eight sectors conducted by them. These included food processing, mechanical engineering, IT, telecommunications, energy, textiles, biotechnology and financial services.

Mr. Gatto said the EU had, in the current negotiations under GATS (General Agreement on Trade in Services) in Geneva, made several offers which, if agreed upon, would meet India's demands like an expanded list of professionals for special visas. Already the EU was India's largest trade partner as also largest foreign investor, and its importance for India would increase with expanded membership. The EU was considering a proposal whereby EU offices in major centres not having consular representatives of some member-nations could accept visa applications on behalf of such member-countries.

Trade representatives of the Netherlands, Italy and France based in Chennai explained the scope of bilateral trade and schemes available for trade promotion.

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