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FTAs to drive domestic reforms, not vice versa: commerce secy

Financial Express | 10 November 2006

FTAs to drive domestic reforms, not vice versa: commerce secy

Economy Bureau

New Delhi, Nov 9 — The Indian industry would have to prepare for the consequences of the free trade agreements (FTA) negotiations and not wait for domestic reforms to help them to get used to the big changes due to global trade, commerce secretary GK Pillai said on Thursday.

“FTAs would drive the domestic reforms, and not vice versa. The industry would be pushed and would also drive changes,” he said at a CII conference here. Referring to the FTA negotiations with different countries, including Japan, South Korea, Australia and the European Union, Pillai said the government would engage industry in a big way on FTA and wanted industry to conduct sectoral studies for the same purpose.

Reacting to CII-WTO & Trade Policy Committee chairman RV Kanoria’s statement that there were several apprehensions within the industry on FTA, Pillai said, “We (the government) need a position paper from the industry.” The commerce secretary said a committee headed by Planning Commission member Anwarul Huda would soon be submitting its report to the Prime Minister regarding the issue of inverted duty structure coming into place because of FTAs.

“The report would enable a systematic structure to deal with the issue,” he said. Pillai said talks on India-EU pact on trade and investment would commence in March, 2007, and added that “discussions with EU may go on for two years and implementing would take another seven-eight years. We are looking at 2015-2018. Once the FTA is implemented, there would be 90% tariff elimination and duties would come to zero.”

Pillai said the industry would have to perfect its testing mechanism, do thorough research, look at the infrastructural needs and learn the art of not importing any goods.

He asked the industry to inform the government regarding all issues related to services and non-tariff barriers.

 source: Financial Express