Palm oil boil may delay FTA with Asean
29 December 2006
Palm oil boil may delay FTA with Asean
AMITI SEN
TIMES NEWS NETWORK
NEW DELHI: India’s hopes of signing a free trade agreement (FTA) with the Asean countries during the Asean Summit next month may not come true. The Asean has refused to respond to the country’s offer of pruning its negative list further to 490 items from 560 items proposed earlier. India had made its fresh offer earlier this week in an attempt to fast-track the negotiations that had almost come to a standstill due to disagreement over the negative list. A negative list comprises items to be excluded from tariff reduction commitments.
Speaking to ET, sources said the Asean wants India to offer deeper cuts in import duties for certain agricultural items such as palm oil, coffee and black pepper. It also wants that duty reduction on the identified items should begin earlier than five years from the date of implementation of the FTA as proposed by India.
Asean’s primary interest lies in palm oil where it has demanded that duties should be pruned to 30-40% within five years of the implementation of the agreement instead of 50% within 10-12 years period as suggested by India. At present, palm oil attracts a duty of 75%.
Officials said that while India could improve its offers on the identified agricultural products, the Asean has to show some initiative and reduce its own negative list first. Asean, which initially produced a composite negative list of 600 items, later increased it to 1,000 items. Interestingly, in its FTA with China, the Asean has maintained a negative list of less than 300 items. “There is no reason for Asean not to offer us the same negative list as it has offered to China,” an official said.
One thing that has now become clear is that the agreement would not be signed in the Asean Summit, tentatively scheduled for January 15-16 in Indonesia. Sources said that hectic parleys are on between officials from both sides but Asean’s inflexible approach was not helping things. “We are trying our best. However, an agreement in the next 15 days seems improbable,” the official added.
