Antony raises objections against FTA with Asean
Econoimc Times | 23 July 2009
Antony raises objections against FTA with Asean
Nirmala Ganapathy, ET Bureau
NEW DELHI: Defence minister A K Antony has expressed reservations against the free trade agreement (FTA) with Asean, which comes up for clearance
at the Cabinet meeting on Thursday.
Mr Antony, whose views matter, has conveyed to the leadership that signing of FTA should be postponed in the light of the changed global economic environment . According to him, the agreement will adversely impact workforce employed in traditional sectors like coir, marine products, cashew industry, pepper and natural rubber.
The Kerala government has also been arguing that the customs tariff of not just the primary agricultural products but also processed products like cashew kernels , tyres and coir products should be maintained at the maximum levels to protect the domestic sector. Mr Antony is learnt to share this views of the LDF government .
Government sources, however, said that the Asean-India FTA had been negotiated on the mandate given by the government . They maintain that FTA would open up large markets for Indian goods and that there would be gains in industrial products and other areas.
Mr Antony, sources said, is of the view that the agreement will hit traditional farmers in Kerala and the labour they employ. This will expose the Congress to attack from its rivals in Kerala, where the party currently enjoys a high approval rating. Mr Antony will get support of ministerial colleague Vayalar Ravi if FTA is pushed for clearance at Thursday’s Cabinet meeting.
Under the India-Asean-FTA agreement , duties on around 4,000 items will be eliminated over a period. The items range from chemicals to electronic goods. The negotiations, delayed by two years, were held up because of objections from Indonesia and Malaysia, which wanted India to cut tariff on items like crude palm oil, pepper, tea, coffee and refined palm oil.
After the differences on tariff cuts had been narrowed down, the UPA government late last year announced that the India-Asean FTA would be signed at the Asean summit which was initially supposed to take place in Thailand in December 2008. That summit was postponed to February but by that time the UPA government was in election mode. With the world in the grips of an economic recession, the government did not think it could risk signing an FTA at that juncture and took the call of postponing it for after the elections.
But it seems that the government’s plans for FTA could once again be upset. When asked about agreement, external affairs minister S M Krishna, who is in Thailand for the India-Asean-East Asia summit, refused to give any date for signing it. He was quoted as saying, “perhaps we can look forward to a very meaningful development when the summit (India-Asean ) takes place in October in Thailand.”
Both sides had agreed to implement FTA from January 1, 2010, but the schedule might also be up for review now.
The government has already announced that the text of the trade-ingoods agreement has been finalised and that discussions on agreements in investment and services would start soon with Asean members — Brunei, Singapore , Cambodia, Indonesia, Malaysia, Laos, Myanmar, the Philippines, Vietnam and Thailand.
