Indian Express | 11 December 2004
Bilateral pacts to go beyond trade
NEW DELHI, DECEMBER 10: In a major policy shift, the government has decided to convert all preferential/free trade agreements (PFA/FTA) into comprehensive economic cooperation agreements (Ceca). This reverses the UPA government’s bid in recent maonths to embrace bilateralism aggressively.
The decision seems to be aimed at mollifying the World Trade Organisation (WTO), whose Director-General Supachai Panitchpakdi cautioned India against goiong the whole hog with PFAs/FTAs at the World Economic Forum’s summit in New Delhi on Tuesday. “Cecas might be a more saleable proposition in multilateral fora,” is how an official phrased it.
PTAs/FTAs usually involve structured reduction in tariffs between two countries. Cecas would cover preferential relaxation of FDI rules vis-a-vis the partner country, tax holidays on investment and income, easing of visa restrictions etc. Trade in services too would come under the purview of a Ceca.
An official said the arrangement would make the ‘distance and content’ of such pacts open-ended and lead to greater engagement between the two countries. Progressive reorientation of the pact’s components would be possible, whereas bilaterals have a limited mandate, he said.