EU-India FTA and the Shift Towards Bilateral Trade Deals
Why in the news
At Business Standard Manthan, Nirmala Sitharaman said India should lean towards bilateral deals as global institutions weaken. The EU-India FTA talks were meanwhile accelerated by the visit of the European Commission President.
Key facts
- Minister’s view: “Multilateralism is sort of out”; focus on bilateral trade, investment and strategic ties.
- WTO: unable to curb China’s hidden export subsidies or ensure a level field.
- WHO: credibility questioned due to the influence of big powers like China.
- US under Trump: left the Paris Climate Agreement; blocked appointments to the WTO appellate body.
Way forward for India
| Step | Detail |
|---|---|
| Plurilateral routes | Join the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) |
| Regional deals | Sector-specific pacts give leverage and better terms |
| Capacity | Stronger negotiators; better coordination among ministries |
| Concessions | Offer strategically weighted concessions; give priority to market access |
Background
Multilateralism traditionally shielded weaker economies from stronger ones; tariff wars have weakened trade norms and encouraged protectionism, so bilateral pacts are becoming mainstream.
Exam angle
- MPIA: a WTO-linked appeal arbitration arrangement.
- Agreement under negotiation: EU-India FTA.