Indo-Thai trade pact by Feb-March 2012

The much-awaited Comprehensive Economic Cooperation Agreement (CECA) between India and Thailand is expected to be concluded by next February-March, even as both sides look towards smoothening out the problem areas.

Both countries have agreed to double their bilateral trade by 2014 from around $6 billion at present. This was decided during the recent visit of Thailand Prime Minister Abhisit Vejjajiva to India. On the other hand, Commerce and Industry Minister Anand Sharma said talks to conclude the treaty might be wrapped up by the year-end.

“There is a new renewed momentum no doubt. There is an interest now in concluding the talks. But it might be February or March of next year when we can look at closing the negotiations. Talks have been going on with Thailand since the formulation of the Early Harvest Scheme (EHS). We will now have to narrow down to the priority areas and come to serious negotiations but we do not see any major roadblocks as such,” a senior commerce department official told Business Standard.

Since the implementation of the EHS, both sides have abolished duties on more than 80 tariff lines or products. With the signing of the CECA, tariffs would be abolished on as many as 94 items. Both sides are also looking towards having a trilateral trade corridor that would link both the countries through Myanmar.

“Our main demands are services, movement of persons and cross–border supply. We are now competitive in all modes of supply. We have demands in IT-related services, tourism and manufacturing. They will be in a position to give us much more bilaterally than what they can have offered multilaterally, which is understandable,” the official added.

The official also clarified since the agreement would encompass trade in goods, services and investment in a single undertaking, it would be referred as CECA and not a free trade agreement.

Thailand is also party to the trading block of the Association of South East Asian Nations or Asean with which India has a free trade agreement in merchandise goods while a deal on services trade in underway.

The EHS had come under severe protest when it was signed and it was one of the main reasons why talks on having a comprehensive trade agreement were in limbo all these years.