ASEAN-India FTA set to kick off in January
Zakki P. Hakim The Jakarta Post, Jakarta
Members of the Association of Southeast Asian Nations (ASEAN) agreed on Sunday to start implementing a planned free trade area (FTA) with economic powerhouse India in January next year.
Under the plan, tariffs on 105 products will be gradually cut under an early harvest program (EHP) with the prospect of zero tariffs by 2007. The products include unprocessed agriculture products, chemical and manufactured products.
Leaders of the regional grouping are expected to approve the plan at a summit in November this year in Vientiane, Laos.
The decision was taken during the last day of a three-day ASEAN Economic Ministers (AEM) meeting here, where trade and economic ministers from the 10 member countries of the regional grouping met with their counterparts from the region's key trading partners to push FTA plans and boost economic cooperation.
It was agreed during a leaders summit in Bali last year that the more developed countries of ASEAN would set up a fully fledged FTA with India by 2011, with the new members of the grouping following by 2016.
ASEAN founding nations are Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, while Cambodia, Myanmar, Laos and Vietnam joined later.
Trade between the ASEAN countries and India reached US$8.07 billion last year, a slight decline from $8.42 billion the previous year.
Indian Minister of Commerce and Industry Kamal Nath told a press conference that the implementation of the EHP should have started in November, but due to some "unsorted things," the schedule had to be delayed.
"But now we are on track to complete these (steps)," Nath said.
But the two sides have yet to resolve disagreement on what are termed the rules of origin affecting the 105 products. It is hoped that an agreement can be reached before the leaders' summit takes place.
The ministers on both sides have also agreed to prioritize seven areas of economic cooperation for immediate implementation, including collaboration in information-technology (IT), outsourcing, and investment in information and communication technology (ICT) parks.
Elsewhere, ASEAN also agreed to start FTA talks with Australia and New Zealand next year, with the hope of concluding them in 2007.
The decision was taken during a meeting with Australian Minister of Trade Mark Vaile and New Zealand Minister for Trade Negotiations Jim Sutton.
ASEAN exports to Australia and New Zealand stood at $18.85 billion last year, up 77 percent from $10.67 billion the year before.
"The economic integration would double approximately the size of the effective joint market," Sutton said.
"The integration is going to drive political stability and security (in the region)," he added.
The deals followed similar agreements on Saturday to push for FTAs with Japan, South Korea and China.
Also on Sunday, the ASEAN ministers met with the European Union Trade Commissioner Pascal Lamy, who hailed the regional grouping's plan to integrate its economies and become like an EU- style single market and production base.
Lamy told a press conference that the economic integration via liberalization drive would provide a major boost in attracting global foreign direct investment.
"... We believe that this is a strong incentive for the development of investment and trade in the region," Lamy said.