The Department of Commerce conducted a Chintan Shivir on strategy for Free Trade Agreements (FTAs) and SOP for Trade Negotiations on May 16 and 17, 2024 at Neemrana in Rajasthan. The Chintan Shivir facilitated discussions on various issues related to negotiations of FTAs by India and the position and strategy that should be adopted for such negotiations.
The attendees also deliberated on the standard operating procedure (SOP) for FTA negotiations, capacity building and resource management for trade negotiations. It also included certain contemporary issues under modern FTAs such as labour, environment, gender, etc.
A roundtable was conducted with former secretaries and ambassadors on the FTA strategy, which deliberated on the need to balance geopolitics with geo-economics and regional trade agreements with multilateral trade agreements. The roundtable also identified that FTAs should foster value chain development and the importance of integrating non-trade issues like trade and Sustainable development due to their significance for market access. It included issues like what was noted in the chapters negotiated with the European Free Trade Association (EFTA) countries.
The Chintan Shivir, which was organised in collaboration with the Centre for Trade and Investment Law (CTIL) and the Indian Institute of Foreign Trade (IIFT), unfolded across six dynamic sessions and one roundtable, each delving into critical themes.
Session one on ‘India’s FTA Strategy and Economic Assessment and Modelling’, highlighted detailed economic studies, comprising models like Computable General Equilibrium (CGE), that are necessary to guide FTA negotiations. It shed light on how economic models help build negotiation narratives but must be used with an understanding of their assumptions and limitations thereof.
The participants also discussed how negotiating investment and trade together can create synergies, and the need for careful consideration of trade policy and industrial policy together.
Session two on ‘Inclusion of New Disciplines into FTAs’ provided an opportunity for participants to explore and understand the implications of new areas such as trade and sustainable development (including environment, labour, gender, and indigenous people) in trade agreements, the issues involved in enforcing domestic laws and ratifying international treaties. Different approaches were followed by developed countries for these areas (US and EU models), and the challenges involved in defining policy space, law enforcement, civil society involvement were also among the themes.
Among others, some of the solutions suggested by participants included constructive engagement with stakeholders, supporting the identification of measures and possible ways out, and exploring pilot projects for the implementation of those commitments.
Session three on ‘Services and Digital Trade in FTAs’ highlighted the significance of service trade, especially cross-border supply, the challenges of data sovereignty, consumer protection and cybersecurity. The session also consisted of the choice between positive and negative listing approaches in service commitments, which had an impact on transparency and negotiation outcomes.
The session also explored India’s data adequacy issues under the European Union General Data Protection Regulation (EU GDPR) and the significant challenges posed by the evolving landscape of e-commerce and digital trade. The speakers also emphasised how leveraging critical and emerging technologies through initiatives like the India-EU Trade and Technology Council (TTC) and the US-India Initiative on Critical and Emerging Technology (iCET) can boost trade prospects for India.
In Session four on ‘Standard Operating Procedures for FTA Negotiations, including Stakeholder Consultations’, speakers and participants discussed the evolution and drafting of SOP and its benefits in enhancing the objectives of trade agreements and creating documentational or institutional memory for future negotiations.
Participants discussed the challenge of on-the-spot drafting, requiring mechanisms to draft agreements in real-time during negotiations to ensure clarity and immediate consensus, and how negotiators can ensure that commitments undertaken are pre-approved.
The discussions highlighted that relevant stakeholder consultations are essential for inclusive and supportive outcomes, how the stakeholders provide critical insights, and hence continuous outreach to stakeholders is necessary to keep them informed and engaged. The participants also explored robust resource management strategies and their implementation to prevent overstraining and ensure proactive problem-solving, thereby providing useful and constructive attributions.
Session five on ‘Capacity Building and FTA Resource Management’ identified that FTAs play a critical role in enhancing national security by establishing strong economic ties and creating frameworks for regulatory cooperation. It also acknowledged that modern FTAs address complex issues beyond traditional trade, including digital trade, data protection, and environmental standards.
Speakers highlighted the importance of interdisciplinary support, noting that successful negotiations require expertise in law, economics, data analytics, and industry-specific knowledge and how gathering expert opinions and insights from various sectors enhances the negotiation process. Participants explored ways to utilise the resources of India’s embassies and missions abroad, leveraging on-ground insights from embassies that would help them understand the regulatory regimes of partner countries.
Discussions in Session six on ‘Leveraging India’s FTAs to address emerging areas’ focused on supply chain disruptions, critical minerals, capacity building, de-globalisation and geopolitical influence. Session discussions identified that FTAs can be used as tools to enhance supply chain resilience, ensuring stability and sustainability in trade relationships.
It also emerged during discussions that India should negotiate a dedicated chapter on critical minerals or critical minerals-based agreements, especially with such mineral-rich countries, to protect India from abrupt disruption in the supply chain. The session also noted that the global trend towards partial de-globalisation and the use of industrial policy as a cover for protectionism and geopolitics now play an equally influential role as geoeconomics in shaping trade policies.
The session suggested that India should use FTAs to build resilient supply chains, focus on capacity building and interdisciplinary expertise, and adapt to the current trend of partial de-globalisation and geopolitical influences.
