EU, India to fight terrorism, push trade
(Reuters)
Updated: 2005-09-08 09:47

'OPEN MARKETS OR LOSE'

The Chinese textiles row showed the difficulties of erecting barriers against the emerging giants of China and India, whose cheap labour and manufacturing prowess frighten many EU nations.

Blair said China and India also needed to open their markets -- calling on them to use the Doha round of trade talks to do so -- but he warned Europe it risked being left behind.

"If Europe does not open up, if it thinks its future lies in protectionism, then it will lose in the end," he told reporters.

India's economy, the third largest in Asia, is set to grow at a robust seven percent in the fiscal year ending March 2006.

India says huge subsidies to farmers in Europe and the United States render Indian farm produce uncompetitive and act as a barrier to increase trade. Its farm products also face market access problems because of stringent sanitary norms.

A group of 20 developing nations share New Delhi's position and their stand has blocked progress at the Doha round of trade talks on a global pact to lower trade barriers and boost economies in poorer countries.

At the summit, Singh said his government had cleared the purchase of 43 aircraft from European plane maker Airbus for state-run Indian Airlines for around $2.2 billion.

The EU is India's largest trading partner, accounting for nearly a quarter of all Indian exports, and India-EU bilateral trade last year stood at $35 billion.

At the summit, Blair backed India's quest for a permanent U.N. council seat, saying the body's current make-up was outdated, but said the EU was split over its bid.

Singh said he was hopeful India would get a place.

Under the EU-India action plan, EU and Indian officials will hold talks on disarmament and non-proliferation of weapons of mass destruction, on terrorism and its financing and on organised crime, officials said.

The two sides will also set up joint panels to boost trade and investment and counter global warming. India said it will take part in Europe's Galileo programme -- becoming the fourth non-EU country to join the programme that rivals the U.S. Global Positioning System.

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