Hybrid trade negotiations: let’s not deal with it, let’s free FTAs

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India recently concluded two Free Trade Agreements (FTAs) – with the United Arab Emirates and Australia – at record speed. They carry the significance of what lies ahead: the proposed FTAs ​​with Britain, Canada and the Gulf Cooperation Council (GCC). There is no doubt that a rapidly changing geopolitical scenario helped accelerate both deals. Yet what may well be a model for the future has been the deployment of virtual and hybrid trading modes – tools imposed by the circumstances of Covid.

Traders adopted Cisco’s Webex platform for video calling and text editing. According to three negotiators I spoke to, the easy editing of text during online meetings – the use of red colors and square brackets to leave contentious issues aside for a later date – helped to speed up the process considerably. . No wonder virtual meetings, equipped with technological tools and without lengthy bureaucratic procedures, yielded results much faster than in-person negotiations.

Between November 2021 and February 2022, there were six rounds of talks with the UAE, three of which were held in physical format, the others in virtual mode. And then, in a face-to-face meeting, if a critical negotiator didn’t show up, there was no need to reschedule, because the person could always join them via video call.

In the case of the negotiations with Australia, almost all major decisions were taken virtually, with only two rounds of meetings being held physically in New Delhi and Canberra. In view of the Economic and Trade Cooperation Agreement (ECTA) with Australia, eight groups have been formed to deal with subjects such as trade in goods, rules of origin, trade in services, technical barriers to trade, etc. The leaders of each group from the two countries – the “track leaders” – were given complete freedom to choose the date and time of these virtual meetings, thus ending the very concept of a “round” of negotiations.

India’s first attempt to sign an FTA with Australia began in 2011. But after four years and nine rounds of negotiations, the process was abandoned as the two countries were already part of the Regional Comprehensive Economic Partnership talks (RCEP) that aimed to sign an FTA. among 16 Asia-Pacific countries. India, however, withdrew from the RCEP negotiations in 2019.

So how did India and Australia get the deal done in 185 days of near-total virtual negotiations, when they failed to get things done after nine rounds of talks in 2011-2015? The answer is simple. A round of physical negotiations would have meant 25-30 officers traveling to Canberra, checking into a hotel and then attending 9-5 meetings over five consecutive days. They would then return to India, waiting about a month for their Australian counterparts to reach New Delhi. Virtual sessions eliminated logistical bottlenecks.

In the virtual format, group leaders decide when to speak; Indian negotiators, for example, held late night sessions to account for the 4.5 hour time difference with Canberra. In a first, Indian negotiators also held industry consultations – some 200 meetings ahead of the Australian pact – via video calls, saving time and resources. In the pre-Covid era, Commerce Department officials were hopping from city to city seeking input from industry associations.

With the waning of the pandemic and the return of international travel, will the GoI return to physical-only mode of trading, abandoning the virtual and hybrid format? It would clearly be retrograde.

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