The Hindu : Front Page : Go-ahead on FTA

Online edition of India's National Newspaper
Saturday, Jul 31, 2004

Front Page

Front Page

Go-ahead on FTA

By K. Venugopal

BANGKOK, JULY 30. Prime Minister Manmohan Singh does not cease to surprise. Less than 24 hours after startling observers by expressing the Government's intention to take another look at the Free Trade Agreement with Thailand, his Commerce Minister Kamal Nath announced today that all apprehensions had been addressed, and that the first phase of the agreement would go ahead as scheduled on September 1.

It was clear that some, if not all, the reservations of the Prime Minister had been addressed at his meeting this morning with Thailand Prime Minister ahead of the seven-nation BIMST-EC summit meeting on Saturday.

The primary source of worry for India had been that Thailand should not become the staging point for exports from third countries. It had sprung from the fact that Thailand already has free trade agreements with China and Australia, which might have enabled producers in either country to run their products through to India at a concessional duty.

Thailand has assured India that would not happen as it would enforce the rules of origin, which means that only those goods which see a 40 per cent value addition in Thailand are eligible to use this route.

Import duties halved

With this accord, import duties on 82 goods such as air-conditioners and refrigerators, apples and grapes will be halved from September 1 and will be free of duty from September 2006. The entire range of products produced in either country will win such a dispensation by 2010.

Success was not as easy to come by for Mr. Kamal Nath at the World Trade Organisation in Geneva where negotiations are under way towards drawing up a framework agreement on agriculture. Mr. Kamal Nath broke away from the negotiations to be in Bangkok today and is flying back again tonight.

Briefing the media on the progress there, he noted that a group of five, namely, the United States, the European Union, India, Brazil and Australia, had been in consultations on resolving the logjam between the developed and the developing countries.

India, in particular, was clear that the $300 billion in subsidies paid out to farmers in the United States and Europe was artificially lowering prices and was not compatible with India's interests. The developed countries must reduce their subsidies, he said.

He noted that the E.U. had agreed to bring them down, but the U.S. had not.

In the afternoon, Dr. Singh flew with other BIMST-EC leaders on a Special Royal Thai Air Force Boeing 737 aircraft to the seaside resort of Hua Hin for an audience with Thailand King Bhumibol Adulyadej at his summer palace.

Longest-reigning King

Born on December 5, 1927, King Adulyadej is the longest-reigning monarch in Thailand, having ascended the throne in 1946 after his brother, King Ananda Mahidol, had been shot dead.

The reverence he wins from his people amazes most outsiders. It is said that in villages people place handkerchiefs on the path for the King to walk on. Once his footprints are on them, the handkerchiefs are picked up and taken back home to become articles of worship.

A union of protocols of the two countries meant Dr. Singh had no officials accompanying him. According to Thai protocol, only two persons are allowed to be with a visiting head of government during the audience with the King. Indian protocol requires that the Prime Minister should always have at least one security guard and a doctor with him. So that determined Dr. Singh's Indian contingent.

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