15 May 2008

FTA hinges on farm deal, US tells India

New Delhi, PTI:

The United States, on Wednesday, said prospects of a free trade agreement with India are “too pre-mature” as it depends on opening of market for agricultural products, though progress has been made in manufacturing and services.

“You can see some progress in manufacturing and services. But true FTA would have to include agriculture. I think it is too pre-mature (to include agriculture),” US Ambassador to India David Mulford told reporters here.
Currently, India is at an advance stage of negotiating an FTA like comprehensive co-operation agreement with European Union.

With US being its second largest trading partner, there have been suggestions from sections of industry, both in the US and India, whether the two countries can open their markets to each other through an FTA.
However, with the US searching for its agricultural products and India being apprehensive about opening of this vulnerable section, the chances of free trade between the two countries are not too bright at this moment.

“The problem with the issue is that FTA, to be really effective would also have to include agriculture. That is an area that is not yet ready for free trade negotiations,” Mr Mulford said.