India-UK FTA Offers Strategic Benefits For Rules-Based Trade, British Peers Conclude

 

London: The “historic” free trade agreement (FTA) with India offers strategic benefits and stability to businesses at a particularly challenging time for international commerce and rules-based trade, according to a UK parliamentary scrutiny report on Tuesday. The House of Lords International Agreements Committee had opened its review of the India-UK Comprehensive Economic and Trade Agreement (CETA) in the months after it was agreed during Prime Minister Narendra Modi's visit to the UK last July.

The cross-party committee charged with scrutinising all treaties laid in Parliament hailed CETA as a “considerable achievement” given that negotiations took place against a challenging geopolitical backdrop of trade tariffs under US President Donald Trump.

 

“The UK has reached a landmark deal with a key strategic partner at a time of considerable geopolitical turbulence," said Lord Peter Goldsmith, who was chair of the committee during the inquiry period.

“We also welcome that the agreement is compliant with World Trade Organisation rules, in light of the current challenges to the rules-based international order. It is a significant achievement, and the government should capitalise on this by ensuring businesses can utilise it in practice," he said.

The committee, which reviewed evidence from stakeholders across government and business, found that the FTA will be helpful to UK businesses as they seek to diversify and de-risk their supply chains. However, it did highlight some shortcomings in areas of legal services, investment protection and “little new market access” for financial or professional services.

 

“We recommend the UK and India view the FTA as a ‘living agreement’, rather than a static one, and prioritise strengthening the terms of the agreement as the relationship develops. The government should utilise the range of existing dialogue mechanisms and networks to further enhance the relationship in substantive and symbolic terms," Lord Goldsmith added.

 

The report, which will now be debated by the Upper House early next month as the India-UK CETA progresses towards parliamentary ratification and implementation, struck a cautionary tone that the FTA agreed between India and the European Union (EU) last month may have future implications for the pact.

Once CETA is enforced, UK consumers can expect to benefit from improved choice and lower prices, although the extent to which British products will remain competitive as India opens its market to the EU "remains to be seen”, the committee pointed out.

The peers highlighted “missed opportunities” in the process of getting the India-UK FTA over the line, such as legal services being omitted entirely from the text and failure to clinch a bilateral investment treaty.