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India FTA likely by December

Bangkok Post | 15 September 2007

India FTA likely by December

Pact would end years of talks with Thailand


India and Thailand plan to finally sign a free-trade agreement by the end of this year, which could bring an end to talks that have dragged on for years, a senior minister from the Indian government said yesterday. ’’We have had a very constructive discussion with Thailand recently and are hopeful that it would be possible to sign the FTA on goods before the end of this year,’’ Pranab Mukherjee, India’s External Affairs minister, said in Bangkok yesterday.

The move comes as the November deadline set by Bangkok gets closer. If the FTA is not concluded by then, the deal would be delayed indefinitely.

Thai Commerce Minister Krirk-krai Jirapaet said late last month that the November deadline would be final as the government of Surayud Chulanont will hand over power to an elected government following a poll set for Dec 23.

’’We therefore said that we want an answer as there would be no use to push for the talks as we have been discussing this for years now,’’ Mr Kirk-krai said at the time. ’’We have been trying to find a way out and now have put the ball in the Indian court, and we have to see how the game is played.’’

Trade talks between India and Thailand started more than three years ago. An early-harvest scheme was agreed to in 2003, but the two sides have failed to agree on a full-fledged free trade agreement.

The early-harvest pact, covering 82 items, helped push trade between the two countries up by more than 125% since 2003 to $3.8 billion in 2006. A value of more than $4 billion is expected this year.

Mr Mukherjee said that the FTA negotiations with Thailand were part of the Delhi government’s ’’Look East Policy’’, which calls for closer relationships with the 10-member Asean, emerging economic giant China and the current Asian powerhouses Japan and Korea.

’’The India-Asean FTA lies at the heart of our engagement with Asean,’’ he said, adding that negotiations should conclude earlier than expected despite the difficulties.

’’I am hopeful that we will see a breakthrough in the coming months,’’ he said. ’’While all sides may not get a solution that meets all objectives, the time has come for us to be pragmatic and find an outcome that is a win-win for both sides.’’

Mr Mukherjee, who was visiting Thailand and South Korea, said that India attached great importance to dealings with Thailand and the Asean countries.

It has consistently increased its engagement with the region over the past few years, both diplomatically and economically.

Total trade between India and the 16 East Asian Summit countries climbed to $80.1 billion last year, or about 26% of India’s total trade value, up from 16% in 1991.

This is evidence that Asian countries will become global leaders in the coming century, he said. The integration of the Asian community would be the ’’arc of advantage’’ that leads to a large-scale movement of ideas and connectivity, the Indian minister said.

Thailand and other countries in the region should also look at ways to link India and Thailand via roadways that were planned a long time ago but have seen little progress, Mr Mukherjee added. A road linking the northeastern states of India via Bagan in Burma and Mae Sot in Thailand would help link India and Asean.

The 1,400-km route needs more construction and upgrades in certain segments, but once connected it would open vast opportunities for goods and services to be traded between India and the rest of Asean, he said.

 source: Bangkok Post