PM firm on Asean FTA

Manages to convince some of his opposing Cabinet colleagues

At the Cabinet meeting on Thursday, Prime Minister Manmohan Singh was able to get an ‘in-principle’ approval of the Cabinet on the contentious Free Trade Agreement (FTA) with the Association of South-East Asian Nations, or Asean.

However, the prime minister’s intervention failed to pass another contentious issue — the Land Acquisition Amendment Bill and the Resettlement and Rehabilitation Policy — as Railway Minister Mamata Banerjee, the Congress’s most important ally in the United Progressive Alliance (UPA), could not be placated.

When the FTA was discussed, senior ministers like Defence Minister A K Antony and Minister for Overseas Indian Affairs Vayalar Ravi — both from Kerala — raised strenuous objections to it.

According to Congress sources, both Antony and Ravi fear the tax-free dispensation for 4,000 items of trade with Asean will spell ruin for the cash crop farmers in Kerala, especially those engaged in cultivation of cashew or palm.

But the PM’s contention was: “We have to do it. Otherwise, we will be isolated in the world economy.” He also cited China’s example to explain why it was important to clear the FTA proposal.

Congress sources said when the PM intervened, the ministers gave in. “You can’t argue with the Prime Minister beyond a point. When the Kerala ministers saw him insisting on the FTA, they retreated,” said a minister present in the Cabinet.

The concerns for cash crops will be addressed by a GoM before signing the agreement with Asean.

However, the Land Acquisition Amendment Bill was another matter.

The PM and Finance Minister Pranab Mukherjee repeatedly tried to explain to Banerjee that the version of the Bill before the Cabinet was “better than the original draft Bill”. Ministers like C P Joshi (Rural Development) and Kapil Sibal (Human Resource Development), who were pressing the Cabinet to pass the Bill without any delay, got the rough edge of her tongue. Banerjee said emphatically “I can’t follow one policy in the state and another at the Centre”.

Mukherjee, who is the key bridge between the Congress and its Bengal ally, intervened. “Perhaps you didn’t understand. There are changes in the Bill and it is far better than the initial Bill.”

Then the PM himself took the microphone and tried to placate Banerjee: “It is a very good Bill.”

But Banerjee was not convinced. Mukherjee also tried to soften her, by pointing out “if you don’t allow this Bill, farmers will suffer.”

When Joshi harped on “industrial development” and “economic development of the country”, the railway minister got irritated. “If you want to go ahead, I should not stay here,” Banerjee said evenly as she prepared to leave the Cabinet meeting.

Mukherjee again had to salvage the situation and asked her not to leave. “There is no immediate hurry to pass this Bill. Since the minister has some objections, let there be further discussion with her,” he remarked.

Ravi supported this proposal and it was decided that Joshi would hold a meeting with Banerjee before bringing the Bills in Parliament. According to sources, even if the Bills are tabled in Parliament, they will be referred to the related Standing Committee.

Today, Banerjee boycotted the lunch hosted by Mukherjee for the party leaders in Parliament. Her MPs and ministers were also not seen in Parliament after the Question Hour ended at noon.

While Banerjee believes the Centre is not moving ahead without taking her into confidence on this issue, Mukherjee hinted to leaders of other parties at their luncheon meet that the government wanted to bring the Bills during the current session of Parliament.