Letter to Frank Field MP from the Rt Hon
Vince Cable MP, Secretary of State for Business, Innovation and
Skills
Annex
Thank you for your joint letter with Nicholas Soames
concerning the written answer given to a Parliamentary Question
about the EU-India Free Trade Agreement (FTA).
You have asked for a more substantive answer and
I am happy to go into more detail here.
Free Trade Agreements such as the EU-India FTA would
normally be expected to contain a series of commitments on the
temporary movement of key personnel and service suppliers. These
are intended both to support other commitments in the agreement—for
example, allowing senior staff to be transferred to oversee investments
abroad—and to provide commercial opportunities for service
suppliers.
Past FTAs have included commitments in five main
categories—Intra-Corporate Transferees, Graduate Trainees,
Business Visitors, Contractual Service Suppliers and Independent
Professionals—among others. All five of these main categories
are drawn from and set out in the EU's Doha Round offer, together
with detailed definitions, safeguards and lengths of stay.
The EU-India FTA is still under negotiation and you
will be aware that India is pushing hard for a very substantive
Mode 4 component, given that this is India's main offensive interest
in the negotiation. In particular, India has asked the EU (and,
through the EU, Member States) to look at where the categories
could be re-defined to be more useful to Indian service suppliers.
We are strong supporters of an ambitious FTA with
India and we are looking at the proposals which India has made.
However, no decisions on the scope of a UK contribution on Mode
4 have been taken yet. In particular, in those categories where
we might set a limit on the number of people who might make use
of our commitments (a "numerical ceiling" in trade language),
no decisions on numbers have been taken.
Turning to the issue of minimum salary, the Parliamentary
Answer set out that we expect the agreement to be consistent with
the Government's intention to apply a £40,000 minimum salary
requirement to intra-company transferees coming to the UK for
more than 12 months.
To expand on that answer, we are also clear that
there will be scope in the agreement to apply the £24,000
minimum salary requirement for intra-company transferees coming
to the UK for less than 12 months and that we expect there to
be provisions in the agreement to allow for the operation of wage
parity testing by UKBA in other categories of service supplier.
2 May 2011
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