ASEAN, India to sign free trade pact by year end
BANGKOK (AFP) — Southeast Asian nations expect trade with India will soar once the regional bloc ASEAN signs a just-concluded deal with New Delhi at a regional summit in December, officials said Friday.
Talks in Brunei Thursday removed the remaining obstacles to the pact, which will liberalise trade in goods between India and the 10-member Association of Southeast Asian Nations, said the group's secretary general Surin Pitsuwan.
The deal covering billions of dollars of trade in goods, but not services, is expected to be signed during the ASEAN-India Summit in December, officials said, though it was not immediately clear when it would take effect.
Talks were supposed to have wrapped up last year, but got bogged down over Indian tariffs on crude and palm oil from regional heavyweights Indonesia and Malaysia, as well as metals and textiles from Thailand, officials said.
"It's done. All final obstacles on palm oil tariffs have been resolved," the Indonesian trade ministry's Director General of International Trade Cooperation Gusmardi Bustami told AFP in Jakarta.
Total trade between ASEAN and India amounted to 28.7 billion dollars in 2006, putting India eighth on the list of the bloc's trading partners behind countries like Australia and South Korea, according to ASEAN figures.
A top Thai trade official predicted that number will rocket once the deal takes effect.
A more limited bilateral deal between Thailand and India was signed four years ago. Before the pact, two-way trade stood at one billion dollars a year, but now has jumped to four billion dollars a year, said Chana Kanaratanadilok, deputy director of Thailand's department of trade negotiations.
"Free trade between ASEAN and India will make a huge impact. Two-way trade between our country and India could average about 10 billion dollars a year," Chana told AFP.
The agreement with India is part of ASEAN's strategy of building trade pacts with major regional partners.
The bloc is pushing ahead with FTA negotiations with Australia, New Zealand and the European Union, and is hoping for the early implementation of a comprehensive economic partnership agreement with Japan.
ASEAN has also signed a landmark deal with Japan's economic rival, China, to create the world's biggest free trade zone by 2010.
Such bilateral deals could play an increasingly important role in future growth after the breakdown in global trade talks in Geneva earlier this week.
The attempt to break the seven-year deadlock in the so-called Doha Round of trade-opening talks hit deadlock between India and the United States over tariffs on agricultural goods in the event of an import surge or price fall.
For India, the ASEAN deal will help expand its influence in Southeast Asia at a time when the country is vying with China for trade ties and access to natural resources.
India adopted a free-market economy in the early 1990s and is keen to expand trade ties with ASEAN, but it is also keen to protect sensitive sectors such as agriculture and textiles, which provide livelihoods for millions.
Talks on the ASEAN deal had stalled over differences on products which India wanted excluded from tariff cuts.
New Delhi had submitted a list of 1,414 products, while ASEAN's target number was 400. The final list is reportedly about 560 goods, but officials would not give details on exactly how the differences were overcome.
