The Hindu : Business : ASEAN agrees to resume free trade talks with India

Online edition of India's National Newspaper
Friday, Aug 25, 2006

Business

Business

ASEAN agrees to resume free trade talks with India

Regional grouping wants India to offer deeper concessions

India agrees to cut tariffs gradually Efforts to free up trade in services and investment

Photo: AP

MAKING HEADWAY: (standing from left): New Zealand Minister for Trade Negotiations, Philip Bruce Goff, Indian Commerce Minister, Kamal Nath and Malaysian Trade Minister, Rafidah Aziz, during the ASEAN economic meetings in Kuala Lumpur on Thursday.

KUALA LUMPUR: The Association of South East Asian Nations (ASEAN) agreed on Thursday to resume free trade talks with India, breaking months of deadlock, but the regional grouping wants India to offer deeper concessions before an agreement is reached.

Malaysian Trade Minister Rafidah Aziz said India's revised offer last week to further whittle down to 560, the items it wants excluded from the pact was a "good sign,'' but that the timetable for tariff cuts, which is spread out until 2022, was far too long.

Agriculture products, ceramics and wooden furniture — key exports from the ten-member ASEAN — were permanently excluded from the tariff cuts, while import duties on palm oil and palm oil products would only be cut from as high as 90 per cent to 50 per cent by 2022, she told a news conference after chairing ASEAN's talks with India.

"We cannot say we are satisfied but we just agreed to go back to the negotiation table,'' added Ong Keng Yong, ASEAN's Secretary-General.

They did not set any timetable to conclude negotiations but agreed that if it could be expedited, they would move on to free up trade in services and investment, Ms. Rafidah said.

Talks between the two sides faltered last year over India's reluctance to open up its market. India trimmed its exclusion list down to around 850 items a few months ago from 1,400 last year, but ASEAN had also rejected it as it still accounted for about 30 per cent of the region's exports to India.

Under its new revised offer, India further cut the list to 560, mainly agriculture and marine goods covering 5.4 per cent of ASEAN's exports. It agreed to gradually cut tariffs on 94.6 per cent of ASEAN's exports to India, compared to 69 per cent previously, including four highly sensitive agricultural imports: refined palm oil, crude palm oil, black tea and pepper.

India is to eliminate tariffs on 77 per cent of products by 2011 and on 80 per cent by 2015, and sharply cut tariffs for the remaining items between 2018 and 2022.

But palm oil producers in Malaysia and Indonesia, which jointly supply 70 per cent of India's edible oil, wanted deeper cuts in palm oil tariffs while some other ASEAN members expressed reservations about the timeframe, Indian officials said during preparatory talks last week. Commerce and Industry Minister Kamal Nath said India would seek to be flexible but indicated that ASEAN members should not ask for too much. He said ASEAN gave India an exclusion list for 1970 products, nearly four times longer than India's list. "India, as all countries, also has its sensitivies,'' Kamal Nath said at the joint news conference.

``At the end of the day, the bottom-line is expansion of trade. All this should facilitate a new momentum for growth,'' he said. — AP

Printer friendly page
Send this article to Friends by E-Mail

Business