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Thai-Indian FTA ’in six weeks’

Bangkok Post, Thailand

Thai-Indian FTA ’in six weeks’

Bloomberg News

12 June 2007

Thailand and India expect to complete negotiations on cutting duties on goods and services and sign a free-trade agreement by next month, according to Commerce Minister Krirk-krai Jirapaet.

Negotiations that began in January 2004 have been hampered by India’s demands to exclude almost 500 items from the tariff reduction package, Mr Krirk-krai said in an interview.

The exclusions mean the draft accord would lower 70% of the trade tariffs between the two nations, less than the 90% World Trade Organisation goal, he said.

"The final contours of this agreement will decide which industries will benefit," said D.H. Pai Panandiker, president at the RPG Foundation, an economic policy group in New Delhi. "It will result in increased trade between the nations and the creation of more jobs."

An agreement will lead to lower tariffs and increase trade between the two nations from $2.2 billion. Thailand has trade agreements with countries including China, Japan and Australia.

"We’re now at the last stage of the negotiations," Mr Krirk- Krai said. "I will show my flexibility, and I hope that my Indian counterpart will also."

Mr Krirk-krai said he aimed to reach a compromise over "sensitive" items when he visits India later this month so that an agreement can be signed by Prime Minister Surayud Chulanont during a trip to New Delhi at the end of June.

India and Thailand have already cut duties on about 80 products, he said.

"We are quite optimistic of a positive outcome in the coming days," said Shipra Biswas, a spokeswoman at India’s commerce ministry. "The work toward signing a trade agreement is progressing well."

India’s Commerce and Industry Minister Kamal Nath said on April 11 that he hoped to conclude negotiations in June.

"I am looking at a continued trade growth of 30% annually between India and Thailand," Mr Nath said after the April meeting with Mr Krirk-krai. "In both countries, economic activity is increasing and we should take advantage of that momentum."

The "sensitive items" India wants to exclude include natural rubber, and some agricultural and manufactured products made by both nations, Mr Krirk-krai said.

Thailand is the world’s biggest producer and exporter of natural rubber.