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Procurement a sticking point in FTA talks

Livemint | 26.8.2011

Procurement a sticking point in FTA talks

India has convinced both New Zealand and Australia not to include the subject in the ongoing negotiations

Asit Ranjan Mishra, [email protected]

India has decided not to include access to its government procurement market in ongoing talks for free-trade agreements (FTAs) with New Zealand and Australia. A commerce ministry official said India has convinced both countries not to include the subject in the trade agreements.

This is “irrespective of whether we include such a chapter with any other trade agreement or not,” said the commerce ministry official on condition of anonymity. India has concluded six rounds of talks with New Zealand and one round with Australia. “We expect the agreement with New Zealand to be signed next year, while negotiations with Australia may require a longer period of time,” the official said.

The issue has been contentious with countries seeking access to India’s lucrative public procurement market through FTAs. The commerce ministry has of late been tight-lipped over the insistence of the European Union for access to the market—something the government opposes.

While India included a chapter on the subject in its comprehensive economic partnership agreement with Japan, it did not give any special concessions.

It limited the scope of the agreement to ensuring transparency and non-discrimination in government procurement measures in accordance with laws.

However, the treaty provides that in case India offers access to its government procurement market to any other country, it has to extend such advantageous treatment to Japan on a reciprocal basis.

It also says the chapter will be reviewed as and when India expresses its intention to become a party to the Agreement on Government Procurement (GPA) of the World Trade Organization.

Commerce ministry officials have said earlier that India may consider joining the GPA, which seeks to remove discrimination against foreign suppliers, once a consensus on a more liberal version of the accord is reached among member countries. India last year joined the GPA as an observer.

Having a chapter on government procurement with Japan does not change India’s position that it won’t negotiate the issue with any country, said Ram Upendra Das, senior fellow at Research and Information System, who was involved in preparing joint study group reports for both New Zealand and Australia. “Until India publicly changes its position, its stand should be considered to be unchanged.”

New Zealand and Australia had demanded inclusion of the government procurement chapter in negotiations while accepting that India’s views differ in the reports of the joint study group set up to evaluate the feasibility of FTAs.

“New Zealand’s objective in a chapter on government procurement is to seek transparency in and liberalization of the government procurement market, thereby enabling New Zealand businesses to have greater opportunities to compete for government procurement contracts in the trading partners’ markets,” New Zealand said in the report.

Australia has entered into five international agreements with substantive provisions on government procurement, according to the study group reports.
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 source: Livemint