Asean doubles its negative list for FTA with India
Financial Express (India)
Asean doubles its negative list for FTA with India
ECONOMY BUREAU
Friday, December 01, 2006
NEW DELHI, NOV 30: Asean has given a jolt to India by deciding to almost double its negative list for the proposed free trade agreement (FTA) with India.
“The negative list which they gave us in August was 2,700 which, after subtracting the overlapping items in the country-specific list, came to a consolidated figure of 600. But on November 17, they came up with a revised list of 6,900 which amounts to a consolidated list of 1,000 plus,” commerce secretary GK Pillai told media on the sidelines of the International Chamber of Commerce of the World Council Meeting here on Thursday.
Pillai added that Asean’s negative list with China was much lower at 2,000 (consolidated list) also less than 600.
Pruning of India’s negative list from 854 to 560 has so far failed to impress Asean. And pressure is still being mounted on India to further reduce the list, according to sources. Significance of a negative list is that items mentioned thereon would not be subjected to phased tariff cut under the FTA.
The government said roughly around 85% of the total 5,224 tariff lines would be bound to zero tariff by 2015.
Official sources said India might further cut its negative list to make the proposed Comprehensive Economic Co-operation Agreement with the Asean a reality. Currently, the proposed agreement with the Asean is referred to as FTA for trade in goods. But as per the October 2003, framework agreement, the pact with Asean was to be broader in canvass, including investment, services as also other areas of economic cooperation.
However, India would consider a further reduction of its negative list only if Asean also made similar concessions. According to the government, the FTA is likely to materialise next month. Both the sides will be meeting in Philippines on December 6 to discuss the details.
Under pressure from Asean, India had earlier pruned the negative list to 854 from an original list of 1,414.
The main roadblock in clinching the agreement for trade in goods, at present, is concerning the negative list, which includes several sensitive items for India like textiles, auto parts, chemicals and agri products. Asean had earlier turned down India’s proposal to set the tariff rate quota for agri products like palmoil, tea and pepper.
Officials said India is also likely to bring down the time-frame of tariff freeze on some of the 290 items. Currently, as per India’s offer, the tariff-freeze on the 290 items is till 2012.
These 290 items are other than those in its 560-strong negative list, which are outside the ambit of trade. The deadline of tariff-freeze on some of these 290 items could be advanced to an earlier date so as to make India’s offer more attractive.
