No takers for Antony’s opposition to Indo-Asean FTA
Economic Times | 25 July 2009
No takers for Antony’s opposition to Indo-Asean FTA
ET Bureau
NEW DELHI: Defence minister A K Antony’s views may count in Congress, but his opinion on economic matters seems to have little support within the
Cabinet. Prime Minister Manmohan Singh on Thursday night could easily get the Cabinet clear the FTA with Association of South East Asian Nations (Asean) as Mr Antony’s opposition to the proposal did not have many takers.
Mr Antony has been maintaining that the FTA will hurt the interests of states like Kerala as Customs tariff of produces such as pepper, coffee and palm oil would have to be brought down substantially in the next 10 years under the agreement. The defence minister said the signing of the FTA could also worsen the situation domestically.
The prime minister argued that Indo-Asean trade has witnessed an increase from a level of $6.93 billion to $39.4 billion between 2000-01 and 2007-08. “A free trade agreement with the Asean is an international political commitment and is also part of the “Look-East” policy,” he is believed to have said. All major economies of the region, including China, South Korea, Japan, Australia and New Zealand, have already signed FTAs with Asean.
The prime minister said that India would gain access for machinery
and machinery parts, steel and steel products, agri produce such as oil seeds, wheat, auto parts, chemicals and synthetic textiles. The prime minister’s arguments got the backing of surface transport minister Kamal Nath, external affairs minister S M Krishna and commerce minister Anand Sharma.
Countering Mr Antony’s arguments, his ministerial colleagues said India’s interests would be protected through a highly sensitive list and India’s negative list. In fact, the highly negative list was created to provide modest reduction in the duties over a longer period of time. Rubber plantations have also been provided protection by placing natural rubber in the negative list.
It was admitted that there could be some protests from domestic industry. But the Cabinet promised to exercise pressure on Asean to commit itself to the agreement in services before the signing of the FTA. “India would gain from an agreement on investment and services,” the ministers backing the FTA said.
Sources said Mr Antony could get the support of only overseas affairs minister Vayalar Ravi and environment minister Jairam Ramesh at the Cabinet meeting.
