India reminds EU of WTO norms
Kamal Nath said Mittal issue was really a question of cross border investment having national treatment.india Updated: Feb 15, 2006 23:25 IST
The raging controversy over Laxmi N Mittal's takeover bid of rival Luxembourg-based Arcelor took a new turn on Wednesday.
India warned European Commission that attempts to thwart the acquisition violated EU's commitment to WTO to accord national treatment to cross border investment.
Taking up the matter with EU Trade Commissioner Peter Mandelson, Indian Commerce Minister Kamal Nath on Wednesday said this was really a question of cross border investment having national treatment.
The minister is also understood to have written a letter toPrime Minister Manmohan Singh ahead of French president Jacques Chirac's visit, when the issue could come up for discussions.
EU had made a request to India that this sort of national treatment for cross border investment should be provided on a reciprocal basis, Nath said in a letter to Mandelson.
"This does not seem to be happening in letter and spirit...It impinges upon ongoing WTO services negotiations," Nath said adding,"we view it with serious concern"."What is happening seems to be not in consonance with letter and spirit as India would like to see that national treatment was accorded to all cross border investments," he said.
Regarding the allegations of racism against Mittal preventing him from the takeover of Arcelor, Nath said these were the issues to be settled by experts in industries and governments cannot get involved in it.
But as far as giving national treatment for crossborder investment was concerned, it was not an issue of passport or colour of a person.
The Netherland-based Mittal Steel has made a USD 22.3 billion bid forArcelor, which would create a steel company with an output three times bigger than its three nearest rivals combined.
The bid has sparked objections from the governments of France, Luxembourg and Spain and from labour unions, who are worried about job losses even though Mittal has assured that no worker will lose job and cited all his operations in various countries had not resulted in retrenchment.
Meanwhile, EC Director General Trade David O' Sullivan said on Tuesday, "The EU is of a clear view thatnationality in such cases is not relevant and it should be decided according to the laws in place and commercial merits."
"It is unfortunate that allegations of racial discrimination have crept in the issue," he added.