Green signal for Ceca with Malaysia
8 January 2006
Green signal for Ceca with Malaysia
Amiti Sen
New Delhi, Jan 8 A comprehensive economic cooperation agreement (CECA) between India and Malaysia may soon become a reality. The joint study group appointed by the two countries to examine the feasibility of such an agreement has given it the green signal.
The JSG, whose report will be officially finalised and submitted to the respective governments next month, has recommended that the proposed CECA is feasible and mutually beneficial in expanding bilateral economic linkages.
A Ceca is a free trade agreement not only in goods but also incorporates services and investment. India, at the moment, has a Ceca only with Singapore.
According to the JSG report, there is ample potential for bilateral trade expansion in a mutually beneficial manner for which adequate institutional mechanism needs to be put in place.
India-Malaysia trade has been characterised by wide fluctuations in imports and exports over the years and in both cases the imports are limited to a narrow range of products.
In services, the JSG is of the view that trade can be expanded though strengthening cooperation and collaboration activities in medicine, healthcare & diagnostic, advertising, audio-visual, financial, tourism & travel, transport and accounting & taxation services.
The Ceca should aim at instituting intra-modal and intra sectoral cooperation and synergies, extensive use of ICT to effectively leverage existing complementarities in the two economies particularly in manufacturing and construction, harmonisation of standards and mutual recognition of qualifications of professional service providers.
In the area of investment, the JSG proposed Ceca should cover three main areas: investment liberalisation, promotion and facilitation. For liberalisation of investment, the general principle of non-discrimination should apply and the standard of treatment should cover national treatment and most-favoured-nation treatment.
