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Unit 23 : Regionalism : EU and NAFTA

in sectors of education, health and environment. Agreement has also been reached on developing a Notes
Disaster Management Prepareness Programme and a Trade and Investment Development Programme.
The trade between the EU and India now stands at some 30 billion US dollars. The two sides have
agreed to intensify their trade cooperation in order to expand bilateral trade and investment flows
several times over. It is important that both India and the European Union create an enabling economic
environment and increasing access to their growing markets to reap mutual benefits. Europe’s
investment in India stands now at around US $5.5 billion whereas in the realm of infrastructure alone
there is scope for investment up to US $150 billion.
Other Areas of Strategic Partnership

Dr. Romano Prodi, President of the European Commission, showed a great deal of interest at the
Summit in EU collaborating with India in the energy sector. He recognized that supply and demand
in this sector were not in equilibrium looking at its worldwide dimension and called the situation
‘dramatic’. He noted that Asia was waking up and the energy needs of counties like India and China,
as of the rest of Asia, would grow phenomenally in the years to come. Their development must not
get stopped, he said, due to lack of energy and EU should come forward to help bridge the gap.
India’s Prime Minister on his part pointed out that apart from energy, there were opportunities for
the EU for investment in other infrastructure development sectors such as roads, rail, sea ports and
airports. Europe could also take advantage of the new drive in India for productivity growth, its
world-class institutes of science and technology and management education, and the boom in
agriculture, biotechnology and pharmaceutical industry. Dr. Manmohan Singh said that India could
be used as a research and development laboratory by the EU to its great advantage while enhancing
job opportunities for Indian scientists and engineers. The Prime Minister also drew EU’s attention to
the vast network of India’s banking system and large financial markets. He invited the European
Union to look at India as an investment destination of promise and great potential. Citing India and
EU as natural partners Dr. Manmohan Singh underlined shared values between the two of democracy,
pluralism, rule of law, a free press and an independent judiciary. The strategic partnership between
India and EU was vital, he said, for managing the challenges of global inter-dependence.
The European Union and India have also agreed to cooperate intensively on countering terrorism
that is proving to be a menace to all their societies and to humankind at large. They will also push
forward the Doha Development Agenda and the Framework Convention on Climate Change. They
will take steps, too, for the promotion of tourism, enhancement of cooperation in the field of film
production and distribution, conservation and restoration of works of art and monuments, scholarly
exchanges between them, establishment of chairs on both sides for civilization studies and study of
contemporary politico-economic systems under the Cultural Agreement signed at the fifth summit.
A Turning Point

The EU-India Fifth Summit thus marks a turning point in their relationship. While taking note of the
ancient bonds between them as important cradles of civilization, the two sides manifested a strong
will to meet the challenges of a new world facing them hand in hand as two poles of stability and as
strong bastions of liberal democracy and market economy. India now greatly looks forward to a new
level of cooperation with Europe from mere trade and investment, which remain very important, to
a multiplicity of other areas impinging on human destiny such as space, science and technology,
environment, peace and disarmament. Together India and Europe constitute more than a fourth of
mankind and a vast chunk of this planet’s natural resource. By putting their hearts, minds and
resources together they can explore their potential to the fullest limit.
23.2 North American Free Trade Agreement

The North American Free Trade Agreement (NAFTA) is an agreement signed by the governments
of Canada, Mexico, and the United States, creating a trilateral trade bloc in North America. The
agreement came into force on January 1, 1994. It superseded the Canada—United States Free Trade
Agreement between the U.S. and Canada.

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