ASEAN-India FTA faces roadblock
Associated Press | 24 August 2007
ASEAN-India FTA Faces Roadblock
By Teresa Cerojano, Associated Press Writer
ASEAN, India Remain Far Apart in Their 4-Year-Old Efforts to Forge Free Trade Agreement
MANILA, Philippines (AP) — Southeast Asia and India remain far apart in their 4-year-old efforts to forge a free trade agreement, differing on the speed and range of liberalization, officials said Friday.
Ong Keng Yong, secretary-general of the 10-member Association of Southeast Asian Nations, reported progress in talks with Japan and South Korea to create separate free-trade areas, but said negotiations with India were largely bogged down.
Officials were hoping the deal could be signed by November during ASEAN’s 40th anniversary summit in Singapore. Prospects appear dim.
Philippine Trade Secretary Peter Favila, chairman of ASEAN economic ministers meeting in Manila, said the absence of India’s minister here hampers efforts. Working groups and senior officials will continue to try to resolve differences, but Favila downplayed expectations.
"Our negotiation with India is very slow and both sides still have big gaps," Ong told reporters.
He said the two sides remain divided over what products to include in the normal track of tariff cuts and what to liberalize at a slower pace under the so-called sensitive track. Another issue is how low tariffs would go and how fast the cuts can be implemented.
While ASEAN prefers to bring down tariffs within five years, India has offered cuts on some products only by 2018.
"We can’t see it in 10 years; that’s too long," Ong said.
A draft report said Indonesia and Vietnam would be most affected by India’s classification of crude and refined palm oil, coffee, tea and black pepper as "special products" enjoying tariff protection or trade restrictions. Palm oil is a politically sensitive issue for Malaysia, while crude oil is sensitive for Brunei and Malaysia.
The draft said India indicated readiness to give preferential market access for the special products once the trade in goods agreement take affect, but "the proposed modality submitted by India ... does not seem to be meaningful enough."
It noted some ASEAN members are concerned it would be hard to justify a deal with India if New Delhi does not give meaningful preferential market access to products of interest to them.
