India-EU Free Trade Agreement (FTA)
The Free Trade Agreement (FTA) between India and the European Union (EU) has been structured to include a mechanism for mediation to resolve disputes expeditiously with the help of a mediator. The formal conclusion of this agreement was announced on January 27, with the signing expected after legal revisions.
Mediation Procedures
- A 'model mediation procedures' annexure is included in the FTA.
- Either party (India or EU) can request mediation if a measure is alleged to adversely affect trade.
- The mediation request must clearly present concerns and specify the measure and its adverse trade effects.
- Mediation can only be initiated by mutual agreement.
- If no agreement on a mediator is reached in time, the mediation request is rejected.
- Mediation typically occurs in the territory of the party addressed, or elsewhere by mutual consent.
- The aim is to reach a solution within 60 days of appointing a mediator, including possible interim solutions.
Dispute Settlement Chapter
- Provides an effective mechanism for avoiding or settling disputes concerning agreement interpretation and application.
- Parties may opt for alternative dispute resolution methods like good offices, conciliation, or mediation.
Key Features of the Agreement
- 93% of Indian shipments will have duty-free access to the EU.
- Imports of luxury cars and wines from the EU will become less expensive.
- The agreement creates a market of about 2 billion people, encompassing 25% of global GDP and a third of international trade.
- Comprises 20 chapters, including a chapter on digital trade focusing on paperless trading and cooperation on regulatory issues.
Most Favoured Nation Status
- India and the EU will grant each other Most Favoured Nation status for five years from the trade deal's inception.
