The Financial Express
Economy
25 November 2004
India, SA nations gearing up for FTA
HUMA SIDDIQUI
New Delhi, Nov 24 — India and members of the Southern African Customs Union (SACU) hope to have a “limited scope agreement” for more liberal trading by next year. The deadline was agreed under the framework agreement that the two parties signed in Windhoek, Namibia, last week. The framework agreement is the first concrete step towards a free trade agreement (FTA).
The terms of the agreement will form the basis of future negotiations between India and SACU, provided it is ratified by the countries concerned.
India and the five SACU member states - Botswana, Lesotho, Namibia, South Africa and Swaziland - have agreed to around 11 articles contained in the framework agreement, officials said.
Senior officials in the commerce ministry indicated that “both sides are committed to the multilateral trading system and believe the process of FTA will contribute to the strengthening of the rules of international trade and south-south co-operation”.
According to the officials, FTA will be concluded in two stages. The first stage will involve the conclusion of an agreement whereby specific tariff concessions on a specific list of products of export interest will be exchanged between the parties. This agreement will be of limited scope.
The second stage will involve the conclusion of the full and comprehensive FTA.
According to sources in the ministry of external affairs, India and SACU have a great deal to gain from a mutually beneficial trade relationship, especially in the light of the many areas where the economies complement each other.
The framework agreement will remain in force until and unless terminated by either of the parties concerned by giving six months’ notice.
India and SACU have said that they will negotiate the FTA in conformity with the rules and discipline of the World Trade Organisation (WTO).
SACU is also attempting to negotiate similar agreements with African and Middle Eastern countries such as Kenya and Egypt.
South Africa has already done some preparatory work on the subject, but would bring all the SACU members into the process as soon as the start of the trade negotiations was authorised. At present, a trade bloc with China and India seems to be feasible as neighbouring countries Lesotho and Namibia have already boosted trade links with China and India respectively.
While South Africa has been concentrating on India and China, Nambia, another SACU member, has been moving forward with proposals on reforming trade relations with the European Union (EU) as well as the main development partners in the Africa, Caribbean and Pacific group.