Missing link

TRADE ZONE/ CHECK POINT

Fortunes depend on timely information.

Being first in accessing information relating to market opportunities is extremely critical in the life of any business. Inadequate information, or inability to receive the same in a timely manner, can translate into late entry and can also lead to loss of a particular market. While availability of instant information is important, the ability to process it within limited time frame to serve desired commercial goal is extremely critical. Not being able to do so, can put survival at stake.

To put this in perspective, the author wishes to take the example of the toy industry in the context of the Bangkok Agreement (now known as the Asia Pacific Trade Agreement). China decided to be a Member of the Bangkok Agreement in 2001 and demanded that India reduce it duties on toys from 30 per cent to 10 per cent. While information was available at various nodal chambers of commerce and industry, it hardly reached the smaller chambers and industrial associations in different parts of India. Neither was this information processed on time, nor did it reach small industries to whom it mattered the most. Result was the collapse of domestic toy industry as Chinese toys captured the market.

Consistent demands from various quarters coupled with the proactiveness of Shri Kamal Nath and his team, has at least partially addressed the problem of information asymmetry.

The author wishes to bring to the notice of his readers that the Indian Commerce Ministry has started putting a lot of information on the proposed FTAs and FTAs that have been negotiated on its website: http://www.commerce.nic.in and www.commerce.nic.in. The link titled, "Trade Agreements/Transit Arrangements" takes the reader to a link which lists out various trade agreements that have been negotiated or are under negotiation. By clicking on any of these individual links, the reader can get information on the respective agreement and in some cases even get information on the list of various items that are included in the FTA or excluded from its purview.

The best link that the author has seen till date in this regard is that hosted by the Singapore government. A country that depends on trade and most importantly respects its trading community actually updates its site on FTAs every week: http://www.fta.sg and www.fta.sg. The site is extremely comprehensive and most importantly provides very detailed information on the status of each agreement the Government is negotiating and even provides the probable lists of items that could be included under the purview of the FTA.

At the same time, it is important to note that the quality of this website is a manifestation of the interest shown by the trading community vis-à-vis using the information made available to them.

In the Indian context, the officers at the Ministry of Commerce regularly complain that while they are ready to put information, there are no demandeurs and most importantly hardly anybody reverts to them after processing the same. In many cases the ministry is actually looking for input before negotiation, but does not receive input.

Let's come to terms with the fact that while technology may reduce asymmetry the responsibility of the human mind to process it only makes information relevant. Shying away from this reality will only make us losers in the FTA ball game.

The author is chief economist at Economic Laws Practice, Advocates & Solicitors