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New Delhi: EU-India trade talks: "hell to pay" for U.S. companies?

What if the world's largest market and the world's second-largest emerging economy deepen their trade relationship--and Washington sleeps through it? While Democratic presidential candidates regularly bash trade, and the White House and Congress spar over an economically insignificant free-trade deal with Colombia, the European Union and India are quietly negotiating an unprecedented commercial relationship.

U.S. companies, at least, are paying close attention. "If Carrefour gets better access to the Indian market than Wal-Mart, there will be hell to pay," said Angela Marshall Hofmann, Wal-Mart's director of international corporate affairs. She reflects Wal-Mart's recent frustration with attempts to penetrate the Indian market and the company's apprehension about the potential gains that Carrefour, the French retail giant, might realize from the EU-India negotiations.

Wal-Mart's concerns seem well founded. Within two decades, half a billion Indian consumers will have sufficient income to buy a television and other accoutrements of a middle-class lifestyle. That market will be a commercial plum for whoever gets there first

American businesses could be affected [by a number of pending issues in the proposed deal], including the exclusion of [any limits on agricultural trade], a bigger slice for Europe of India's burgeoning public procurement spending and new market opportunities for European bankers and insurance companies ...

An EU-India free-trade agreement is far from a foregone conclusion.... European officials freely admit that no more than nine of the 27 member states of the European Union have much interest in the deal. Moreover, neither Europe nor India has a good track record with such agreements.... Still, the United States will discount the current EU-India negotiations at its peril. If a U.S.-India negotiation ever takes place, New Delhi will never concede to Washington more than it has given to Brussels.

Bruce Stokes, National Journal, January 12, 2008: "Europe Hungrily Eyes India"
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Title Annotation:KIOSQUE: Global highlights and local sidelights culled from the media; European Union
Author:Stokes, Bruce
Publication:European Affairs
Geographic Code:4E
Date:Jan 1, 2008
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