The negotiations to conclude a services deal under the free trade agreement (FTA) between India and the Association of South East Asian Nations (Asean), the 10-country trading bloc, is facing hurdles as ‘serious concerns’ emerge over the issue of movement of natural persons, or Mode IV, as referred in trade jargon.
Chief negotiators from both sides would be holding formal talks early next month even as senior trade officials discussed the broad contours of the progress made so far since the signing of the goods deal with Asean and the way ahead in Brunei last week. Commerce Secretary Rahul Khullar represented India.
Even as the review meeting amongst senior trade officials ended on a positive note, “very serious concerns were raised by some countries like Indonesia and the Philippines over India’s demand over greater liberalisation under Mode IV,” a senior commerce department official told Business Standard.
Under the services sector, India had been demanding greater opening in the Mode IV category so that more and more professionals like doctors, nurses, chefs and accountants got greater job opportunities in Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
“Countries like Indonesia have expressed concerns over Mode IV, as they have several problems facing them such as unemployment and unskilled labourers,” the official said.
The commerce secretary had earlier stated that the India-Asean services deal would be concluded by the end of this year.
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The rate of unemployment in Indonesia had inched towards 8 per cent last year, with a total of around 114 million being in the total workforce, while the poverty rate reached 14.15 per cent in March 2009, according to an official estimate. Some of the other south-eastern economies had also been slow in recovering from the financial crisis.
India had signed the goods deal with Asean in August 2009 that came into effect from January this year after over six years of negotiations. This would result in doing away with at least 80 per cent of tariffs in a phased manner between 2013 and 2016. The tariffs on sensitive products would also be slashed by 5 per cent by 2016.