Bilateral Trade Agreements in the Era of Globalization: The EU and India in search of a Partnership

Bilateral Trade Agreements in the Era of Globalization

Author(s):  Sangeeta Khorana, Nicholas Perdikis, May T. Yeung and William A. Kerr.

ISBN: 978-1848447950

Publisher: Edward Elgar Publishing

Year: 2010

Price: ₤65.00

Reviewed by Antonella Viola PhD, CHAM – Centro de História de Além-Mar, Universidade Nova, Lisbon, Portugal.

Trading exchanges between the European Union and India have grown remarkably in the last decades. The book by Khorana, Perdikis, Yeung and Kerr  explores the  implications and  consequences of an EU-India preferential trade agreement. Through a twofold approach which combines a far-ranging overview of the agreement  with a comprehensive analysis of its impact on specific sectors, such as clothing and footwear industries,  the authors provide an insightful account of the potentialities of  a future trading agreement between India and the  European Union.

The book’s first chapter, which serves as an introduction,  provides the reader with the framework within which the agreement would  take place. In the following chapters an assessment of the EU-India agreement, based on a general discussion on the theory of preferential trade agreements and the history of the relations between the European Union and India is made. Then the analysis focuses mainly on two specific sectors: clothing and footwear industries. These two sectors are dealt with in relations with the potentiality of an EU-India agreement and the non-tariff barriers  which could make  the agreement less effective. Non-tariff barriers, mainly identified as regulatory divergences between Europe and India, are seen as major roadblocks for firms operating in the clothing and footwear sectors. As the authors clearly point out, if these barriers are not removed, firms operating in the clothing and footwear sectors might be unable to take fully advantages from  an EU-India agreement. On the basis of the results of a stakeholder survey and the data collected, the book  suggests that an  effective EU-India preferential trade agreement should  take as a point of departure a  concrete and detailed knowledge of the existing non-trade barriers. Knowledge about non-trade barriers and willingness to harmonize regulatory divergences are perceived  as key issues in the negotiations. The potential benefits of a EU-India agreement depend, the authors conclude, on the capacity of both parties to consciously negotiate and efficiently implement the agreement.

Despite the sound analysis and the valuable data provided, the book seems to take a firm-oriented view, paying little attention to the role of consumers. This is not a minor aspect, given the cultural diversity and complexity of a consumer market which would include India and the European Union. If it is clear what firms would gain from an EU-India preferential trade agreement, what would be the major benefits for consumers is less obvious. The book suggests that consumers would benefit from a reduction in prices and this explanation seems enough to justify the agreement’s beneficial consequences. However, low prices is not the only thing that consumers might want. A significant fringe of consumers both in Europe and in India are increasingly concerned with quality,  understood as  respect  for social and environmental issues. Eco-friendly  production  processes and  the ethical treatment of people and animals are becoming important factors, which shape  consumers’ practices and taste. Therefore the allusive suggestion that reduction in prices would be the consumers’ main gain is somehow reductive, especially if no further explanation is given about which services and products will be less expensive and why. Perhaps, an examination of the  agreement’s real benefits for European consumers on the one hand, and Indian consumers on the other would be desirable. It would usefully complement the main analysis, providing further material for a more  balanced assessment of  an EU-India agreement.

By and large, this  is a very useful reading which sheds light on many crucial points regarding a EU-India preferential trade agreement. The argument is presented accurately  and with special attention  to details.  Moreover,  the book is written in a clear and easily understandable style, with little jargon  which makes it a  pleasant reading for all those who have  some interests  in the topic.