Bernama | 27 December 2006

Asean Not Excited By India’s X’mas Offer To Speed Up FTA Talks

By P. Vijian

NEW DELHI, Dec 27 (Bernama) — India’s Christmas offer to cut its negative list to mollify the Association of South-East Asian Nations (Asean) to speed up the snail-paced free trade agreement (FTA) talks does not seem to impress the 10-member regional grouping.

Just days after securing a historical deal with the US to develop nuclear energy, Indian trade officials are now gearing up to tie up the FTA which had been on a roller-coaster since negotiations begun in Laos in 2004.

Trade negotiations between both parties landed on bumpy path after India presented a long negative list with some 1,414 items, which included toilet bowls and naked dolls, that ruffled some feathers among members of the grouping.

However, on Christmas eve, India announced that it was ready to prune the list further to 490 from 560 items, after it was diluted from the initial list of 1,414, that sparked some controversy.

But Asean seems to be little impressed with India’s Christmas offer.

Jakarta-based Asean secretary-general, Ong Keng Yong, said both parties needed to discuss the FTA in depth, as it did not only involve reducing the negative list.

"It is a good gesture on the part of Indian authorities but we still need to negotiate on the actual coverage of the FTA and how much of the goods are on the tariff (reduction) line," he told Bernama in a phone interview from Jakarta Wednesday.

Ong said the FTA should benefit both parties and vital export items like palm oil, pepper and coffee, which are major revenue-earner for some Asean economies like Malaysia and Indonesia should fall under the agreement.

"It is meaningless if palm oil, coffee and pepper are not included and the 15-year time frame to reduce tariff to five percent is too long. Critical issues that need to be addressed are what goods will be covered in the FTA and how fast tariffs can be reduced.

"Overall, there are gaps in the Asean-India FTA negotiations although there is a strong political will on the Indian side to conclude the FTA. There is lot of trepidation at the bureaucracy and business level on how far Indian producers will be affected," he said.

Ong was optimistic that negotiations could now move forward with India’s new package and both Asean and India would like to achieve some level of success by middle of 200 [sic].