Wednesday, September 29, 2010

India’s bilateral trade talks

Since further multilateral trade liberalizations agenda at the WTO is not moving forward (its nearly a decade since the Doha Round started—the Uruguay Round took eight years to complete), India is moving on with “Plan B”, which includes bilateral and regional trade deals. More here

INDIA’S BILATERAL TRADE TALKS

Partner

Start of
talks

Status

Thailand  2001 Under negotiation; likely to be signed in 2010
Singapore  2002 Signed in December 2007; to be reviewed
Sri Lanka 2003 Under negotiation
Mauritius  2003 Under negotiation
China 2003 Joint feasibility study underway
Asean 2003 Trade in goods pact signed in August 
2009; agreement on services to be 
signed soon 
Malaysia 2004 Likely to be signed by December 2010
BIMSTEC 2004 Under negotiation
GCC 2004 Under negotiation
Japan  2005 To be signed in October 2010
SACU 2005 Under negotiation
Chile  2005 Signed in March 2006; to be reviewed 
Israel 2006 Under negotiation
SAFTA 2006 In force
EU 2006 Under negotiation
EFTA 2008 Under negotiation
Australia 2008 Joint feasibility study underway
Nepal  2009 Treaty in force until 2016 
South Korea 2009 Under negotiation
New Zealand 2009 Under negotiation
Indonesia 2009 Joint feasibility study underway
Turkey  2010 Joint feasibility study underway
Pakistan _ No formal agreement; Most Favoured 
Nation status accorded 
Asean          =     Laos, Vietnam, Singapore, Thailand, Malaysia, Indonesia, 
                            Brunei, Cambodia, Myanmar, Philippines
BIMSTEC
      =    Bangladesh, India, Sri Lanka, Thailand, Myanmar
GCC
             =    Kuwait, Bahrain, Saudi Arabia, Qatar, UAE, Oman
SACU
           =    South Africa, Lesotho, Swaziland, Botswana, Namibia
SAFTA
         =    India, Pakistan, Sri Lanka, Bangladesh, Bhutan, Maldives,
                           Nepal, Afghanistan
EFTA
           =    Switzerland, Iceland, Norway, Liechtenstein

India’s style of negotiating trade deals:

[..] India’s approach to trade talks has also evolved in the last seven years. For instance, the cloud of secrecy has given way to a consultative process, where industry associations and trade bodies are consulted and their concerns taken on board. FTAs are generally negotiated based on the feedback of the industry chambers and associations, which form the main basis of the negotiating text for the government. Even though the ministry of commerce and industry negotiates the deals, inputs and suggestions are also sought from other ministries and departments.

One reason for this is the improved political management of trade negotiations. Prime Minister Manmohan Singh created a new institutional framework for trade policy formulation within the government by creating the trade and economic relations committee (TERC), which includes the Cabinet ministers for external affairs, finance, commerce & industry, agriculture, deputy chairman of the Planning Commission and senior officials. TERC has played an important role in securing governmental green signals for FTAs. It has enabled the external affairs ministry to bring to bear considerations relating to foreign and strategic policy on FTAs. When the India-Asean FTA faced domestic political hurdles, for example, it was the external affairs ministry that gave the needed push by underlining the importance of closer strategic relations with Asean.

That apart, Indian industry’s attitude to FTAs has changed. “You cannot compare India of seven years ago with the India of today,” said a commerce ministry official. Over the last few years, Indian industry has also realised it can compete favourably in the global marketplace. “Besides, it has realised that we may have a scarcity of some product today, but five years from now, we might be world-beaters. We are factoring all this in when we go out to negotiate,” the official added.

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