NEW DELHI: India’s negotiations with the 10-nation Association of South East Asian Nations (Asean) for a free trade agreement (FTA) has been perilously close to a collapse even without Congress president Sonia Gandhi’s counseling in her April 12 letter to the Prime Minister to “very carefully scrutinise” the proposed FTA.
 
The timeline of June 2006 for an India-Asean FTA in goods, envisaged in the framework agreement on comprehensive economic co-operation signed on October 8, 2003, is about to be missed because of the “extra cautious approach” taken by Indian negotiators, fearing that local farmers and manufacturers may be swamped by low-cost Asean producers in the wake of import duty cuts under the FTA. India has been dragging its feet even as other major economies like Japan and Korea, besides China, have already put in place preferential trading arrangements with the dynamic Asean region.  Even the Americans and the Europeans have forged ahead in striking trade deals with Asean nations.
 
Officials said the trade and economic relations committee (TERC) chaired by the PM met on May 3 to consider a last-ditch proposal by the commerce ministry to salvage the negotiations, but made no significant headway.
 
The TERC, a body comprising concerned cabinet ministers, overseas the negotiations of FTAs and clears negotiating mandates. Because of its concern that the duty cuts under the FTA with Asean could adversely hit output and jobs in a wide range of sectors in the Indian economy, the Indian government had tabled to Asean an indicative exclusion list of more than 1,000 items that it considered “sensitive”.
 
The products in this “negative” list, meant to be excluded from the FTA, constituted about 42% of the exports of Asean to India.
 
Thus, the effective market access was to be only about 58%. The market access for individual Asean member countries varied from just about 1.25% for Myanmar to 100% for Lao.
 
This almost brought the negotiations with Asean to a dead end.
 
To salvage the negotiations, the commerce ministry analysed the “exclusion list” and identified 66 items for deletion. The deletion of these would increase the market access to Asean as a whole and to individual member-countries to about 92%.
 
These 66 items are major products being presently exported by Asean nations to India.  In fact, in his April 20 reply to Sonia Gandhi, the PM has stressed the “serious and professional study” of issues that the government has undertaken to ensure that domestic agriculture is not adversely affected by the FTA, officials said.
 
Meanwhile, the Left parties expressed doubts over the Congress chief’s sincerity about her reported concern over the FTA affecting the debt-ridden and distressed farmers in the country.
 
“If the government is really serious about mitigating the sufferings and hardships of the farmers, it must reverse its decision about removing licensing and quotas on import of agricultural products”, said CPI (M) politburo member Sitaram Yechury.
 
CPI general secretary A B Bardhan said “the government must come forward to ensure that the prices of agricultural inputs are lowered.”