Kerala concerned over impact of trade pact

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The Hindu | 5 September 2016

Kerala concerned over impact of trade pact

by T. Nandakumar

Expressing concern over India’s move to widen trade ties with other countries in the Asian region, including China, the State Cabinet has urged the Centre to ensure that Kerala’s interests are not compromised by trade pacts.

The Cabinet meeting on Wednesday decided to step up pressure on the Centre to protect the State’s fisheries, industrial, and agriculture and allied sectors from the impact of lower trade tariffs dictated by Free Trade Agreements (FTA).

A Cabinet note moved by Agriculture Minister V.S. Sunil Kumar expressed concern over the threat posed by the Regional Comprehensive Economic Partnership (RCEP), a proposed FTA between 10 member States of ASEAN (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam) and their six FTA partners — India, China, Japan, South Korea, Australia, and New Zealand.

Pointing out that both the Indo-ASEAN FTA and Indo-Sri Lanka FTA had been detrimental to Kerala’s agricultural sector, the note said the lowering of trade tariffs had eased the import of agricultural products such as rubber and spices, driving down the demand for domestic produce and impacting on the State’s economy.

India’s trade policy, it said, had been more of a handicap than advantage for the agriculture and allied sectors, with the trade deficit widening after the Indo-ASEAN FTA came into effect. Any move to lower the import tariff further would add to the trade deficit, choking the economy.

The meeting observed that the agricultural sector in India was poised to take a big hit as RCEP opened up trade ties with China, a nation that relies on monopoly practices to boost trade. The import of milk and dairy products from Australia and New Zealand and fish, soyabean oil, rubber, rice, palmoil, tea, coffee, pepper, and poultry from ASEAN countries would pose a major threat to farmers, affecting their livelihood, it said, urging the Centre to consult States on tariff negotiations.

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source: The Hindu