Speech by Mr Romano Prodi, President of the European Commission at FICCI

Ladies and Gentlemen, 

First of all, many thanks to the Federation and the JNU University for organising this conference, very much in keeping with their tradition of hospitality which I have enjoyed on other occasions. It gives a splendid opportunity to share with you my vision of EU-India relations and the bright future for them we all want to see. 

We have just had a very successful EU-India political summit, the fourth since 2000. Our summits, far from being sporadic or empty exercises, have become the pillars of our relationship.

Today's meeting was no exception. I am particularly pleased to announce that India will cooperate with the EU in developing the Galileo Satellite Navigation and positioning programme. 

This ambitious programme will be an advance on the existing GPS system and it is very important that Countries like India are willing to join the EU in this major undertaking. India's decision follows on the heels of that of China, which signed an agreement to join GALILEO at last month's EU-China summit in Beijing. 

GALILEO, unlike the current GPS, is a project focusing exclusively on the civilian uses of positioning. This project has huge potential and India has made the right decision in coming on board. It means that your specific needs will be taken into account right from the start. 

Today we also announced the conclusion of a Customs Cooperation Agreement between India and the EU. This will help us to boost trade thanks to more efficient and transparent procedures. 

Another piece of good news is the Indian side's expression of interest in negotiating a maritime agreement. Currently goods leaving Shanghai or Bangkok reach the EU faster than goods from Mumbai. A maritime agreement would do much to bring down delivery times and costs and to increase efficiency in the transport sector, key elements in boosting trade between our markets. 

Our trade cooperation will also be boosted by next year's launch of the Trade and Investment Development Programme (TIDP) signed today. This programme focuses on the day-to-day problems faced by traders on both sides, problems concerning sanitary and phyto-sanitary standards, intellectual property rights, investment facilities, customs procedures and the like. This project is sure to produce tangible results that will make it easier to do business. 

We all know that the EU is India's main trading partner and principal source of foreign investment. What is less well known is that India is the second most important Asian investor in Europe. I want to underline this point because it shows that we enjoy a mature relationship. 

Today's Europe offers single market with no restrictions on free movement of persons, goods, services or capital, equipped with uniform tariffs and common rules, a common external trade policy and convergent economic policies. In addition, the European commission acts on behalf of the EU member states in the WTO, concluding trade agreements on their behalf, both at bilateral and multilateral levels.

And, although three member states have not yet adopted the Euro as their legal currency, they are fully part of our Economic and Monetary Policy and their currencies are pegged to the Euro. 

I am aware that some observers in India are still reluctant to fully incorporate this dimension into their vision of Europe, but you cannot escape the fact that the EU is your economic partner. 

Last year the EU accounted for more than 23% of India's exports and more than 21% of its imports. 

Since 1991 trade between us has trebled, from € 9.9 billion to € 27 billion. And trade is much more balanced than generally believed: there was a € 929 million surplus for the EU in 2002 against a € 304 million surplus for India in 2001. 

We have launched a number of initiatives to further improve on this situation by upgrading and diversifying our trade. To do that we must achieve even more added value in our trade. Trade in services has also grown phenomenally over the last decade and the EU's investment in India rose from $27 million in 1991 to $529 million in 2001.

The fourth EU-India business summit, which traditionally takes place in parallel with the political summit, has been discussing the outlook for our business relations in more detail. According to our surveys, a large majority of EU investors in India consider their experience to be a success, whatever the undeniable difficulties, India is a key location. Other surveys highlight the prospects for India's economic growth and single it out as a potential key trading partner for the EU. No doubt about it: India needs the EU, the EU needs India. 

Since we need each other economically, we cannot avoid cooperating in a broader multilateral arena. 

The failure to reach agreement in Cancun was a major setback. The world has benefited enormously from the multilateral trade system, especially countries like India. If we fail to conclude the round, the worst affected will be the smaller and the least -developed WTO members. 

This missed opportunity in Cancun was a disappointment for the EU, which, since seattle, has taken a lead in the negotiations and made some significant concessions on many agenda items.

Even though some observers have not fully recognised this, negotiators from different sides admit that the EU showed flexibility and willingness to deliver. 

We have to break the impasse and give a new momentum to the WTO negotiations by acting together. This means we have to set aside blame and recriminations. Trade negotiations are a win-win exercise. But to advance we all have to make concessions. Those are the rules of the game. 

But now I would like to look beyond trade and the economy. 

In India the EU is seen by many as important only in terms of trade and economic matters. However, this is a serious misconception. The world is an ever-changing arena. And the EU is one of the best examples of the dynamics of international relations. 

At present, the EU is fully immersed in an extraordinary process of consolidating its integration. The EU enlargement process in hand illustrates the scale of this project.

On 1 may 2004, ten new member states will join us. Indeed, they are already almost members of the Family. For me it is extraordinary opportunity to be presiding over the European Commission throughout the preparations leading to this historic moment .

In the 1950s six countries emerging from the terrible effects of the second world war decided to launch an ambitious project of economic integration to overcome the causes of the numerous European conflicts of the past. This project is rooted in three basic concepts: peace, prosperity and progress.

The dark pages of our history have made us want to improve our present and our future prospects. And, you will agree with me: this goes far beyond economic integration.

Enlargement and the need to further consolidate integration called for an in-depth review of the EU institutional arrangements. The European Convention, which concluded its work in July 2003, brought together representatives from member state governments, (including the future members), parliaments and the European institutions to respond to the following challenges:

-to adapt our institutional system to an enlarged EU with 25 members;
-to clarify and streamline EU legislation so that European citizens know what the EU does and what the member states do;
-to find agreement on how best to develop existing policies and areas where new powers could be attributed to the union.

The draft of the EU constitution was presented in July this year, and it is currently under the scrutiny of the inter-governmental conference. Most probably, we will have an EU constitution by the end of the year that will enter into force as soon as it is ratified by the member states.

Despite all differences in size and structure between South Asia and Europe, the European experience could offer an example. We decided to overcome our differences by sharing the sources of our prosperity, first through coal and steel, then by progressively abolishing all trade barriers. The benefits of this process took away any reason for conflict.

If the achievements of south Asia's Regional Integration have been less impressive so far, why not consider alternative routes to reach the same goals? If the trade creation effects in the region are relatively limited, could a common approach to the infrastructural and energy challenges faced by your countries not provide a new impetus to the SAARC in order to reach the ultimate goal of peace and stability?

The EU as an international actor is sui generis: an example of shared sovereignity and citizenship going well beyond the concept of international organisation. At the same time, we have no ambition to do away with our member states. We do not want to replace our national cultures and identities.

The younger generations are very much ahead of my own in this: the young citizens of Europe, familiar with this concept since birth, already feel much more European than their parents. But the older generations can compare the tremendous costs of the former "Non-Europe" with what we have today. You may disagree with this or that aspect of the union, but no one can deny the benefits we have gained by joining forces.

This stronger European Union we are building is a leading player in international relations. Just as India is called on to play a major role on the world stage, Europe is increasingly expected to assume new international responsibilities. Let me give just a few examples of this.

Whatever the disagreements earlier this year, now we should all be brought together by a shared determination to work with the people of Iraq to build a better future for them and for their region. The EU and India have both expressed their readiness to cooperate in the reconstruction of Iraq and the reorganisation of Iraqi institutions. We both believe in the central role of United Nations.

We can argue that the Iraqi crisis will probably represent a turning point in international relations. Many of the consequences are still far from clear. It is a challenge not only to the EU but also to all the major international players: states, international organisations, and even NGOs and civil society. 

In the Balkans successive crises tested our capacity to act in unison but, though hampered by weak coordination at the beginning of the 1990s, we have made impressive progress throughout the past decade.

And now we are ready to embrace the Balkan countries in a new wave of enlargement, so completing the process of reconstruction and rehabilitation we have supported since the end of the wars.

The EU is of course extremely grateful for India's support in peacekeeping and civil policing activities in the region. Its traditional engagement in peacekeeping missions demonstrates its commitment to international law and the role of the United Nations in providing international peace and security.

With the 'Wider Europe' concept we aim to work in partnership with neighbouring countries to develop an adjacent area of prosperity and stability - a 'Ring of Friends' - with whom the EU enjoys close, peaceful and cooperative relations.

What does this idea mean in practice? In return for demonstrable progress in the direction of shared values and effective implementation of political, economic and institutional reforms, all the neighbouring countries would be offered the prospect of a stake not only in the EU's internal market but also a broader access to the four freedoms-goods, capital, services and persons - and all community programmes.

The mediterranean region will never be completely stable without a real progress in settling the conflict between Israel and the palestinians. The EU was first to promote the roadmap which appears today, despite all the difficulties, as the point of reference the parties will have to return to sooner or later. Of course India shares this commitment to the peace process, which again underlines our common interests and commitments on the international stage.

In Afghanistan, the EU is committed to the reconstruction process, which is part of our global strategy to establish peace and stability in the region. We are committing € 1billion to the task. And I would like to stress that India fully shares our views and is equally proactive, committing USD 100 million of its own to the task.

The EU's "preventive diplomacy" has recently proved very successful in Iran, where initiatives to handle the nuclear issue dramatically improved the prospects of a peaceful outcome to a potentially risky situation.

The EU is a global actor in its own right: the EU represents more than the sum of its member states. One thing you can rely on is a further strengthening of its external policy; any strategy based on the opposite conclusion would be a serious miscalculation. The EU is here to stay.

As I mentioned earlier, the EU and India have upgraded their relations in both quality and depth in the last few years.

In a rapidly evolving international environment India and the EU have to play intelligently on the basis of their many common interests. Looking beyond the well-established trade and economic agenda, we must further strengthen our capacity to work together on terrorism, promotion of democracy and human rights, global environmental threats, sustainable development, and scientific research and telecommunications.

All these issues require ambitious common responses in the framework of a multilateral system to which India and the EU are committed.

My suggestion is that we work together on a new ambitious strategy.

And in working on this future strategy we must not overlook the cultural dimension to our relations. India and the EU have so much in common in the cultural arena that we should use it as a platform to build stronger relations. And indeed much has been done in recent years. Let me mention just the most recent development: 26 projects were selected a few days ago in the framework of the EU-India cross cultural programme. This programme will bring together institutions from the EU and India to work together on many exciting cultural projects that will strengthen ties between us. One example: institutions from three different European countries and from India will work together to digitise and disseminate a large corpus of historical documents related to the history of economic relations from the XVth century to the present: a way to work on our past linking it to our present and future.

The commission is also preparing an ambitious programme of EU scholarships, thereby filling a much felt gap: this will be very useful in reforging the longstanding links between Indian and European Universities.

You can get a taste of our amazing cultural diversity at the EU cultural weeks taking place in Delhi and other Indian cities. I firmly believe that these forums provide an exciting opportunity to learn about our respective cultures and to enhance our mutual understanding. European culture, like India's has many facets. "United In Diversity", the motto we have chosen for the new Europe that will be crated by the constitution we are in the process of finalising, clearly in my view illustrates the fact that difference does not mean exclusion.

I am sure this is the right way to go about strengthening EU-India relations. We should not make the mistake of limiting them to trade and investment, even if these are the fields where the greatest progress has been made so far. The future depends on our capacity to work together with shared determination to deal with all the other common challenges we face. And drawing on our common cultural roots will help us to do so.

Indians and Europeans have a historic opportunity to strengthen and build on their relations. By doing so, we can help shape a more secure and prosperous world. Let us be ambitious and aim high.