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ASEAN wants to ‘re-engage’ India on stalled FTA

SINGAPORE: The Association of South East Asian Nations (ASEAN) wants to “re-engage” India to resolve the “practical” issues stalling the signing of their free trade pact.

New Delhi’s response to this offer is expected during the ASEAN-India meeting and the parallel East Asia Summit to be held in Thailand in April. Union Commerce and Industry Minister Kamal Nath is likely to represent Prime Minister Manmohan Singh at these meetings.

The Free Trade Agreement (FTA) was ready for signature by last December, but the relevant meetings were postponed because of Thailand’s political crisis. And, this delay, compounded by the ASEAN’s preferred timelines for cascading tariff cuts, has rendered the signing of an agreed draft contentious.

India is unwilling to extend to the 10-nation ASEAN two sequential tariff cuts in a single financial year, first in June and later in January 2010. As a result, ASEAN was unable to press ahead with its plan to have the FTA signed last month.

And, the trading bloc, recognising the substantive point about India’s objection, is now ready to address “the issue at stake.”

This is identified by ASEAN’s chief negotiator Rebecca Fatima Sta Maria as “the practical readjustment of the timelines” for the tariff cuts. Dr. Rebecca told The Hindu that the objective “is not the unravelling or the renegotiation of the [draft] agreement [on tariff lines] itself.”

Even the timelines for effecting the tariff reductions by both sides “are not cast in stone at this point.” An issue for ASEAN was whether the sequential tariff cuts in the “normal track” could be completed by 2012 as originally planned. However, “it will be difficult” now, Dr. Rebecca noted. Also, the missed deadlines for signature were “not unlike [those] in the World Trade Organisation [talks], in essence.”

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