Thailand protests delay India-Asean FTA

Talks on the ambitious India-Asean Free Trade Agreement (FTA) have received another setback due to the violent protests at the Asean summit venue in Thailand last Sunday.

An eight-member delegation from India could finish only official level talks, aimed at ironing out the remaining differences on the duty-free trade agreement. “The final discussions were to be held at the summit. But they were canceled and the issue could not be sorted out,” said a government official.

Last Sunday, more than 1,000 anti-government protesters, nicknamed Red Shirts, stormed the venue of the Asean summit, demanding resignation of Thailand’s Prime Minister Abhisit Vejjajiva. India’s Commerce Minister Kamal Nath and Commerce Secretary Gopal K Pillai were evacuated in a helicopter from the summit venue with other heads of states.

The last remaining bone of contention relates to a demand by Asean to have duty cuts twice within the first 12 months of the deal being made operational. The FTA was scheduled to be signed in December 2008 and made effective by January 1, 2009.

It was being hoped that the FTA would be signed on a subsequent date following the negotiations in Thailand, and made operational from mid-2009.

“We had told them that this (duty cuts) was not possible. Just one meeting is needed to iron out the issue,” the official added.

Meanwhile, government officials point out that the new government at the Centre will be responsible for signing the FTA with the South-East Asian economic bloc. “If the new government wants to review the FTA talks, then the signing could get further delayed,” said another government official. Negotiations on the FTA were sealed in mid-2008.

In fact, of about 15 similar deals being negotiated by India with its trade partners, Asean FTA is at the most advanced stage. Another FTA with South Korea is also nearly complete.