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 Kamar Nor Aini Bt Kamarul Zaman
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 The Economic Times
 India-Asean FTA hinges on Indonesia, market access

21/03/2008 (The Economic Times), New Delhi - The India-Asean free trade agreement (FTA) seems to have come within clinching distance, though the month-end deadline for concluding the negotiations will not be met. In the recent high-level officials meeting in Cambodia, the Indian side managed to make the Asean members happy with their side of offers. The Asean countries, especially Indonesia, however, have to come up with some more concessions to seal the deal.

Speaking to ET, official sources said Asean’s improved offer was expected to be made early next month, following which the negotiations would be concluded. “We want Indonesia to match India’s offer of bringing 80% of the total trade products on the zero duty list. We also want all Asean members to improve their offers on products listed as sensitive commodities,” an official said.

While all other Asean members have committed to eliminate duties on 80% of tariff lines, Indonesia is the only country holding out. “It has to agree to play by the rules,” the official added.

Another issue that India is uncomfortable about is the market access offered on products termed as sensitive by Asean countries. India’s contention is that while it has accommodated the interest of the Asean by agreeing to substantial duty cuts on palm oil (both crude & refined), pepper, tea & coffee, items of primary interest to some Asean members, the Asean countries have not reciprocated to the same extent in case of their sensitive commodities of interest to India. “We want better market access for products such as automobile components and some agriculture products,” the official said.

India has agreed to reduce duties on the four agri products substantially and bring it to 40-50%. This means that whatever the level of duties India decides to maintain for the products, it would be not higher than the committed levels for the Asean countries. “Asean’s offers on their sensitive products of interest to us does not match our commitment levels. We have asked them to improve it,” sources said.

Asean is expected to come up with the improved offers by early April. It will be ratified by ministers only when both sides are satisfied with the agreement. Once the agreement is in place, the duty cuts will be implemented over the next decade. 

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