Goods pact in hand, Asean goes slow on services deal
Economic Times | 21 Apr 2010
Goods pact in hand, Asean goes slow on services deal
Amiti Sen,ET Bureau
NEW DELHI: Having secured a good deal in merchandise trade in the free trade agreement, the ten-member Asean is dragging its feet on meeting India’s demand for liberalising trade in services and investments, especially movement of professionals.
The Asean also wants each country of the ten-member bloc to make a separate offer to India, but wants one composite offer from India, which will weaken India’s bargaining position, a government official has said.
India’s request for more clarity in rules for allowing professionals to work in the Asean territory by carving out a separate annexure on the issue has not received a positive response from the group.
“India has always been keen on getting more access for its professionals in foreign territory and we want the pact with Asean to clearly state the manner in which movement would be liberalised,” a commerce department official told ET.
A separate annexure in the agreement on services and investments would permit details to be built in so that liberalisation could be achieved in a transparent manner.
India would, for instance, want mutual recognition agreements (MRA) to be a part of the agreement in areas such as medicine, healthcare, education and architecture so that qualified professionals in such areas can work in Asean countries without the requirement of additional local qualifications.
The Asean, however, is not keen on having a separate annexure on the subject and wants it to be part of the chapter on services. “We are hoping to persuade them,” the official added.
Indian professionals can increase their presence in countries such as Singapore, Malaysia and Thailand, which have English speaking population, once access is liberalised.
The regional trade bloc is also insisting that India give one offer for opening up its markets in services and investment to all Asean members whereas the ten Asean countries will make separate offers to India.
“This does not make sense as some countries in the region might want to offer us more compared to others and, therefore, should get more in return,” the official said. Experts reckon this condition would reduce India’s bargaining position vis-à-vis countries that do not want to offer much.
Senior officials will meet in Kualalumpur at the end of the month and India will host another meeting in June to iron-out differences. “We want the agreement to be signed during the India-Asean Summit in Hanoi in October,” the official said.
The free trade agreement in goods implemented by India and Asean on January 1, 2010 will be converted into a comprehensive economic partnership agreement once the services and investment pact is signed. The FTA, which will eliminate tariffs on more than 4,000 goods over the next decade, has been ratified by Singapore, Thailand and Malaysia. The remaining countries are expected to hop on board as soon as they get domestic clearances.
