Asean, India to resume FTA talks

The Association of South East Asian Nations today demanded that India make further tariff concessions in its list of goods and services offered under a beleaguered free trade agreement (FTA) as the two sides agreed to resume FTA talks suspended by the 10-member grouping because of alleged lack of progress.

"They have to make further concessions, otherwise it will be a standstill," Rafidah Aziz, Malaysia's International Trade and Industry Minister, said after the India-Asean Economic Ministers' consultations here.

Rafidah, who co-chaired the talks with Commerce Minister Kamal Nath, declared that the 10-member grouping has not given a deadline for the FTA negotiations.

"Deadlines are immaterial, we are still determining the basics," she told a press conference, adding that deadlines had been changed many times. Nath said the meeting had been "constructive" and that "expeditious efforts will be made" to get the India-Asean FTA negotiations moving.

In a bid to accelerate the slow moving Asean-India FTA talks, India last Friday offered new tariff concessions covering over 90 per cent of the grouping's exports to it.

India had revised its earlier tariff reductions offered for 69 per cent of the items, raising it to 94.6 per cent. It also offered to cut import duty on some highly sensitive products which were of significant export interest to certain Asean members.

These were refined palm oil, from 90 percent to 60 per cent, crude palm oil, from 80 per cent to 50 per cent, black tea, from 100 per cent to 50 per cent and pepper, from 70 per cent to 50 per cent.

Asean, however, does not seem to be impressed with India's new trimmed list of items. New Delhi trimmed down its list of items that it wanted excluded from the pact to 560 goods covering only 5.4 per cent of Asean's exports.

A few months ago India had brought down the list to 850 from 1,440 last year after the South East Asian grouping protested that India had too many items on its exclusion list.

"Most of our discussions today were concentrated on outstanding issues in trade in goods," Rafidah said, adding the negotiators will look into the mechanisms in the services area after substantial progress was achieved in the "goods area."

She said the two sides had made "some headway" and added that very basic achievements had been reached which could serve as guidelines for officials to proceed further during talks.

As an impetus to moving the trade in goods negotiations forwards, the ministers agreed that each Asean member should provide India with its individual sensitive list, while India should provide Asean with its one common single sensitive list, a joint statement issued by both sides after the consultations said.

The ministers also agreed that the negotiations on goods be concluded early and talks on trade in services and investment should begin once substantial progress had been made in the parleys on trade in goods, the statement said.

Despite the challenges, trade between Asean and India has gone up. In 2005, total trade increased by 30.4 per cent from $17.6 billion in 2004 to $23.1 billion in 2005. Nath noted that Asean's FTA engagement with India offered an over one billion people market.