ASEAN-India to speed up free trade area talks
26 September, 2005
VIENTIANE, September 27 (Online): India and the Association of South-East Asian Nations (ASEAN) Monday agreed to accelerate negotiations on the establishment of a free trade area (FTA) between the two sides, IANS reported Monday.
Senior economic officials from the ASEAN and India discussed a draft protocol to amend the Framework Agreement Comprehensive Economic Cooperation inked in 2003 to establish an ASEAN-India Regional Trade and Investment Area (RTIA) including an FTA.
The officials agreed to hold a workshop on rules of origin in Indonesia in October, Bounsom Phommavihane, deputy director general of the foreign trade department of Laos' commerce ministry and chairman of the SEOM-India consultation group, said at a press briefing after the meeting.
Due to differences on some issues during the negotiations, the officials "agreed to delay the launch of the FTA to February 2007, instead of February 2006 as specified in the framework agreement," he said.
He said that the proposal would have to be submitted to the upcoming ASEAN Economic Ministers (AEM)-India consultation meet for approval.
The two sides have been unable to resolve differences pertaining to rules of origin. ASEAN is not ready to accept India's twin criteria to determine rules of origin, namely the value addition method and change in tariff heading (CTH).
Rules of origin are designated to prevent third countries from taking advantage of an FTA between two countries. If some goods do not meet the origin criteria, they are deemed as originating from a third country and cannot be traded under the FTA.
Setting up the ASEAN-India FTA in goods is targeted for completion by Dec. 31, 2011, for Brunei, Indonesia, Malaysia, Singapore and Thailand, and India. For the Philippines, Cambodia, Laos, Myanmar and Vietnam, the target is Dec. 31, 2016.
India-ASEAN trade posted an annual growth rate of 11.22 percent in the 2001-2003 period, up from nearly $9.9 billion in 2001 to roughly $12.1 billion in 2003, according to India's commerce ministry.
The 37th ASEAN Economic Ministers (AEM) meeting will be held here Sep 28-30.
The 10-member ASEAN has a population of about 500 million, a total area of 4.5 million square km, a combined gross domestic product of $737 billion and a total trade of $720 billion.
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