Prime Minister Manmohan Singh today called for an early conclusion of negotiations with European Union (EU) and the Association of Southeast Asian Nations (Asean) over liberalising trade. According to sources, the Prime Minister told officials and ministers at a meeting of the Trade & Economic Relations Committee (TERC) to try and conclude the free trade agreement (FTA) with the EU and the Comprehensive Economic Cooperation Agreement (CECA) with Asean.
India and Asean have been negotiating to expand their FTA to CECA, but the Philippines and Indonesia oppose the move. Citing this, some TERC members suggested that talks with Asean be suspended for the time being.
While FTA is an agreement on goods, the CECA includes goods, services and investments.
TERC is an institutional mechanism for evolving the extent, scope and operational parameters of economic relations with other countries in a coordinated and synchronised manner.
Chaired by the Prime Minister, TERC comprises Finance Minister P Chidambram, Commerce & Industry Minister Anand Sharma, External Affairs Minister Salman Khurshid, Deputy Chairman of the Planning Commission Montek Singh Ahluwalia, Chairman of Economic Advisory Council C Rangarajan, among others.
Negotiations for the India-EU FTA, officially known as the Bilateral Trade and Investment Agreement (BTIA), have been on since June 2007. It has missed many deadlines since, as both sides differ on many contentious issues.
India, for instance, has been seeking a single visa for its professionals on short-term contractual visits to the EU. On the other hand, the 27-nation bloc has been pushing for a significant reduction in customs duty on cars, wines and spirits on their exports to India.
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The two sides also differ on inclusion of intellectual property rights (IPR) and data security in the agreement. The EU wants India to commit to IPR over and above the World Trade Organization (WTO) obligations.
The free trade pact aims at slashing duties on over 90 per cent of the bilateral trade between India and its largest trading partner. The two-way trade stood at $110.26 billion in 2011, up from $83.37 billion in the previous year.
India’s trade with Asean is growing with a compounded annual growth rate of 42 per cent over the last two years. Exports to Asean have doubled from $18 billion in 2009-10 to over $36 billion in 2011-12, while imports grew around 65 per cent from $25.7 billion to $42.5 billion.