The EU-India trade agreement, which has been agreed in outline between the two sides, is an important political signal. Like the Mercosur agreement, it is a move by the EU to underline its commitment to trade deals, diversification and a rules-based approach at a time when the policies of Donald Trump are upending the current system.
It is also important economically, though trade with India is relatively limited and, if the agreement is voted through, is likely to rise only gradually. EU car companies will have freer access, but subject to quotas. Tariffs will be cut in a range of other areas, including some of relevance to Ireland such as pharma and spirits. Irish whiskey is one possible significant beneficiary.
The beef sector is excluded, making Irish backing for the final deal likely, though details of its full terms have still to be published. India’s strong ties with Russia may cause some political push-back across the EU.
For India, it is part of a drive by prime minister Narendra Modi to open up the economy and attract new investment. He also hopes to provide a new market to exporters struggling with 50 per cent tariffs in the US market.
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It is no coincidence that two EU deals many years in the making with South American countries and India have now been completed. It is a signal of “ business as usual” in the face of Trump’s threats. The EU/US trade deal, agreed in outline last year, was itself threatened by Trump’s recent plan to impose tariffs over Greenland and it remains to be seen if it is finally agreed and implemented.
For Ireland, trade diversification is important. The Coalition has welcomed the India deal, in contrast to its stance on Mercosur. Chambers Ireland – the body representing the chambers of commerce – has called for an independent review of the new safeguards put in place since the Programme for Government commitment to oppose Mercosur. This appears a reasonable way forward, particularly given the huge weight given to agricultural concerns in the debate to date.
