Thai team coming to discuss FTA
Financial Express, India
Thai team coming to discuss FTA
AMITI SEN
25 July 2005
NEW DELHI, JULY 24: A high-level team from Thailand is visiting New Delhi on Monday to discuss the details of the proposed India-Thailand free trade agreement with Indian officials. Issues including the number of items on the negative list and the rules of origin (ROO) governing the FTA would be taken up at the meeting, according to sources.
The Thai team including government officials and business representatives will meet commerce ministry officials on July 25-26. The team would be in New Delhi till July 29 to take inputs from various sectors concerned. Thailand is unhappy with India’s proposed negative list of 1,400 items and wants it to be shortened.
Thailand had agreed to go by India’s proposal of a twin criteria for determining ROO for the early harvest programme. But for full FTA, the country wants only one criteria — the value added criteria. Strong ROO is necessary to prevent third country goods to flow into the markets of the FTA members at preferential terms.
India believes that the value addition criteria mandating 40% domestic content in a product is not sufficient safeguard against third country products and wants the second criteria of change in tariff head (CTH) to be used.
India’s argument is that sometimes a product can meet the value added criteria without sufficient physical changes taking place if prices of factors like rent or labour cost are high.
The CTH criteria would ensure that only products which undergo sufficient physical transformation are granted tariff preference.
