By Mahesh Prasad
New Delhi, April 20 (NNN-BERNAMA) India has alleged that the Association of South East Asian Nations (Asean) is again acting tough on free trade agreement (FTA) negotiations that may push back the targeted July 2007 deadline.
The Economic Times daily here Thursday quoted Indian Commerce Ministry officials as saying that Asean's latest position that India should have a reasonable tariff reduction for crude and refined palm oil could throw a spanner in the works.
They are reported to have said that as India has already ceded a lot of ground during the earlier rounds, including whittling down its Special List of products on which no tariff reduction will be offered immediately, the latest stance of Asean before the 16th and probably last round of negotiations looked "regressive and intractable."
The report said the Asean negotiators, in talks with their Indian counterparts, alleged shallowness in India's insistence on keeping five products of export interest to Asean countries like Malaysia in the Special Products List.
For products on this list, India proposed to reduce tariffs to 50 per cent by 2022, which it feels is a very flexible schedule compared with other tariff lines covered in the FTA.
The Asean side had pointed out, the report said, that since the Customs duty on palm oil is already 50 per cent, a commitment to cap it at 50 per cent in 2022 has little relevance.
India, however, argued that this may not be the case as the recent cuts in palm oil import duty, aimed at addressing shortages, should be considered the norm.
New Delhi's patience is running out, said the report, as it reckons that since the October 2003 agreement between the two sides to have a comprehensive economic co-operation, it has made a lot of compromise.
During the talks since then, India had pruned its negative list in phases to 490. On the other hand, the consolidated negative list of Asean countries had risen from 600 initially to more than 1,000.
The report said Asean had a shorter negative list for its FTA with China. "We have been more liberal (in conceding to demands) with Asean than with other countries we are negotiating FTAs or comprehensive economic co-operation agreements with, like Korea, Japan and the Gulf Cooperation Council," a Commerce Ministry official was quoted as saying.
In addition to the negative lists, both India and Asean have "sensitive" lists of around 700 items each, on which tariffs will not be cut to zero but to five per cent by 2011 and on the rest by 2018.
However, since Asean is not a union like the European Union, there is greater divergence in interests among its members than among the EU members, which is reckoned to be one reasons why it showed a somewhat tepid response to Indian moves.
The precedence that Asean gives to China over India is also one factor that weighs on their negotiating stance, the report said.
The newspaper also reported that Asean Secretary-General Ong Keng Yong said the July 2007 deadline for concluding the FTA talks with India, set by the Asean and Indian heads of governments in Cebu, the Philippines, early this year, is optimistic.