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Asean-India FTA negotiations reach deadlock

The Star, Malaysia

Asean-India FTA negotiations reach deadlock

18 November 2012

Negotiations to widen the Asean-India free trade agreement in the services and investment sectors have reached a deadlock.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed informed his Asean colleagues yesterday that negotiations had been tough and faced many hurdles.

Malaysia is the coordinating country negotiating for the Asean-India FTA on services and investment sectors which started last year.

“Three months ago Malaysia had told our friends in Asean that we are quite optimistic as we were told at that time there were some flexibility and some compromises which were agreed on.

“But when we went into the nitty-gritty, we encountered a number of hurdles. Negotiations have been tough as we led the Asean team for several meetings. As we went along, it was obvious to us it is going to be difficult.

“So today I reported to my colleagues that for the moment it is not going to be possible to reach an agreement on services and investments with India,” he told the Malaysian media after the Asean Economic Meeting here yesterday, on the eve of the 21st Asean Summit.

Mustapa declined to reveal the next step, adding that Asean leaders would meet their Indian counterpart this week and again next month in New Delhi for the Asean-India Summit.

On the Regional Comprehensive Economic Partnership (RCEP) between Asean and six of its dialogue partners to be launched on Tuesday, Mustapa described it as a milestone for the grouping which started trade liberalisation on a smaller scale with the Asean Free Trade Area.

“From Afta, Asean moved on to single FTA with dialogue partners and now it has gained momentum to the RCEP.

“The RCEP is an important initiative as it improves on what we have already implemented and will benefit Malaysia.

“The government has already endorsed RCEP and soon we will be meeting other stakeholders including the private sector,” Mustapa added.

Negotiations on the RCEP bet-ween the 10-member Asean and its partners - Australia, China, India, Japan, New Zealand and South Korea - are expected to start in February. It will be the largest trade bloc in the world.

The RCEP is aimed at consolidating the FTAs between Asean and its dialogue partners to ease trade procedures and boost the flow of trade and investment within the Asia-Pacific region.

Mustapa said trade with the RCEP countries represented 70% of Malaysia’s market, adding that it was not a threat to the Trans Pacific Partnership of which Malaysia was also a party.