Deadlock on FTA with Thailand
Financial Express, India
Deadlock on FTA with Thailand
Huge Indian list of sensitive items remains a sore issue
By AMITI SEN
13 August 2005
NEW DELHI, AUG 12: The high-level negotiating team from Thailand that visited New Delhi recently was unable to break the impasse on the India-Thailand free trade agreement.
The revised list of sensitive products submitted by India comprising about 1,100 items failed to enthuse Thai officials, who want the list pruned to less than 500 items.
Thailand also refused to budge from its demand of going in for just the value-added criteria for determining rules of origin (ROO) instead of the twin criteria adopted for the early harvest scheme currently under implementation.
ROO is an important part of any FTA as it is the criterion needed to determine the national origin of a product. The value-added criteria being pushed by Thailand lays down that any product in which 40% value addition has been done by the member country should qualify as a product from the member country.
India, however, is apprehensive that the value-added criteria alone may not be enough protection against third country exports since the value of a product can be enhanced by factors like high wages and rent without substantial physical transformation taking place. It also wants the second criteria of change in tariff heading (CTH) under which origin is granted only if the exported product falls into a different part of the tariff classification to any imported inputs that are used in its production.
India, however, is not ready to give up the CTH criteria as it fears that the value-added criteria could lead to third country imports from countries like China and Korea flowing into India on concessional terms.
