Wide differences on FTA with ASEAN persist

New Delhi, May 8 (UNI) With some of the ministers endorsing Congress President Sonia Gandhi's concern over giving away market access for agricultural products, differences persist within the government, over India signing a Free Trade Agreement with ASEAN.

''The problem areas with India-ASEAN mainly relate to liberal norms governing the value addition norms and the rules of origin'', sources in the government said. Simply put, any of the ASEAN members can import, say, milk from China, skim it and export to India duty-free to the detriment of the farmers.

While the Ministry of External Affairs is pushing for a liberal FTA with the Association of South East Asian Nations, there is a strong resistance from many other ministries which want a comprehensive ''Negative List'' to protect the interest of farmers, particularly edible oil, tea, pepper and rubber. The problem is that the ASEAN, especially Malaysia, does not want any 'Negative List' and if at all, it is insisted upon, they would like this list to be small. Besides differences within the government, there is a division between the government and Congress Party.

In response to Mrs Gandhi's letter of April 12, the Prime Minister replied on April 20, stating that adequate safeguard mechanism was being built into the India-ASEAN FTA. ''There were five levels of checks built into the system'', PMO sources said.

In view of a strong sentiment against the agreement, particularly with regard to the agricultural products, a compromise being worked out is the Tariff Rate Quota (TRQ). Under the TRQs, the duty-free or concessional duty market access is made available only upto a fixed quantity. The moment, the imports reach a TRQ level, they attract the normal duties.

While TRQs are being considered for at least three items - tea, coffee and oil, there is a demand for widening the list for inclusion of products like rubber and pepper. '' It is because the existing duty on products like pepper is in excess of 85 per cent'', sources said.

As per the negotiations, the FTA must cover at least 80 per cent of the items of trade for each of the ASEAN members.

While the Prime Minister talked about India going ahead with the FTAs on pan-Asia basis, agreements on track relate to Sri Lanka, Mauritious, Singapore,Thailand and ASEAN.

''The agreements with Gulf Cooperation Council can kill our petro-chemical industry and the one with China will be suicidal'', highly placed government sources said.

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