Singhing in a new free trade zone
The Economic Times, 27 October 2005
Singhing in a new free trade zone
DELHI : Move over World Trade Organization (WTO), regional trade arrangements are here to rule. Prime Minister Manmohan Singh has rolled out a roadmap that envisages free trade with all neighbouring countries, Asean and nations in the Gulf region by ‘06, even as talks at the WTO remain stuck over one issue or the other.
If the proposed regional pacts fructify, India would have established free trade with countries accounting for nearly one-third of world population, most of them high-growth economies. Putting the proposed trade pacts on the fast tracks would also mean that some of the ground work may reflect in the ‘06 Budget.
In implementing PM’s trade diplomacy, several import concessions would be given to neighbouring countries like Pakistan, Bangladesh and Myanmar while India is also likely to back Afghanistan’s entry into the Saarc Free Trade Agreement (Safta). A slow of sops have been lined up for African countries too.
These steps are aimed at enhancing India’s economic engagement with the global community, even if WTO talks do not result in any major improvement in market access. At the same time, New Delhi could gain support for its bid to win a permanent seat in United Nations’ Security Council, especially from developing and least developed countries (LDCs).
PM’s vision, being crystallised by the Trade and Economic Relations Committee (TERC) which is headed by him, also envisages free trade agreements (FTA) with the EU, South Korea and Israel. A significant pact with Russia is also on the cards while a comprehensive economic cooperation agreement (CECA) is being negotiated with Mauritius - on the same lines as the Singapore CECA. However, the much-discussed FTA with China is not on the agenda now since trade between the two countries is booming anyway.
Mr Singh is of the view that neighbouring countries should have more stake in India’s economic development and benefit from it, Prime Minister’s media adviser Sanjaya Baru said on Wednesday. Addressing mediapersons during an informal chat here, he said countries like Bangladesh and India have a huge trade deficit with India.
While the TERC has authorised duty concessions for textiles from Pakistan and Bangladesh, import of pulses and wood from Myanmar is also being eased. Instead of specific duties which are imposed now, textile imports from both countries would be subjected to ad valorem tariffs once the prime minister’s directives are implemented. Market access for textiles was a issue taken up personally by Pakistan President Pervez Musharaff.
The necessary notifications are likely to be issued after the textile, commerce & industry, and finance ministries clear the necessary procedures. While Safta is slated to kick in from January ‘06, Bangladesh has sought compensation for the revenue it has to forego in the form of exempted import duties.
