Even as hectic activities are going on between India and the European Union (EU) to hastily finalise the contentious Indo-EU Free Trade Agreement (FTA), the Communist Party of India (Marxist) has demanded to the central government not to conclude the negotiations at this stage and instead wait for the report of the Parliamentary Standing Committee on Commerce which is examining the issue in detail.

In a statement, the Polit Bureau of the CPI(M) also demanded to the government to conduct a parliamentary debate on the issue, hold public consultations with all affected groups, and share the texts of the current negotiating process and conduct, on their basis, impact assessment studies.

The CPI(M) is particularly concerned that the entire negotiating process has been non-transparent, with a total lack of public consultation with affected sections, parliamentary oversight, or the involvement of state governments. Despite repeated expressions of concern by political parties including the CPI(M), the government has moved forward with the process, shunning even a modicum of effort to arrive at a political consensus on the issue. The Parliamentary Standing Committee on Commerce is examining the impact of FTAs but the government’s determination to sign the EU-India FTA without waiting for the Committee’s report betrays a shocking disregard for parliamentary democratic institutions, the Polit Bureau of the party said.

The FTA with the European Union is the most ambitious and comprehensive of all FTAs that India is negotiating or has signed. Its impact on the economic and social fabric of the country could well be deep and long lasting. The agreement is likely to worsen the already burgeoning current account deficit and trade deficit. Evidence from trade agreements that India has already entered clearly indicate that they further worsen the country’s trade deficit. For example, in the case of the agreement with Singapore a trade surplus was rapidly converted into a deficit after the signing of the FTA, it said.

The CPI(M) further said that the higher standards of intellectual property protection will have a negative impact on health services; strong investor protection mechanisms will undermine the government’s ability to regulate industrial and financial corporations in national interest; and the opening up of government procurement to foreign firms will undermine even the minimal social protection measures in place, such as the public distribution system. The agriculture sector is likely to be particularly affected by the dumping of subsidized agricultural products from the EU.