Says even if the pact is signed, farmers and cash crops in the southern state won’t suffer
As apprehensions over India’s Free Trade Agreement (FTA) with the Association of South-East Asian Nations (Asean) are rising within the Congress establishment, the Manmohan Singh government today moved into action to pacify the worried leaders from the party’s Kerala unit.
Top government managers today met Congress leaders and MPs from Kerala, including Congress Legislative Party leader Oommen Chandy, and tried to assure that even if India signed the Asean FTA, Kerala cash crops and farmers would not suffer.
But Chandy and others have planned to meet Prime Minister Manmohan Singh and party president Sonia Gandhi over this issue. They met Commerce and Industry Minister Anand Sharma and some others today.
In a note circulated to some Kerala MPs on the Asean FTA, the government managers said: “On critical items of interest to India, including crude palm oil, refined palm oil, coffee, black tea and pepper, tariff cut would be effected with reference to the prevailing rates of 2005, which were in the range of 80 per cent for crude palm oil, 90 per cent for refined palm oil, 100 per cent for coffee and black tea and 70 per cent for pepper. It is pertinent to mention that the MFN rates are 0 per cent for crude palm oil and 7.5 per cent for refined palm oil”.
“India’s commitment for tariff reduction by 2019 would entail a tariff of 37.5 per cent for crude palm oil at the end of this period. Similarly, for refined palm oil, coffee and tea, the tariffs would reach a level of 45 per cent by 2019. For pepper, the tariff would be at a level of 50 per cent by 2019,” the note added.
“India has insisted on a tougher regime for Rules of Origin which would ensure that a product would be counted for import from a particular country if there is at least 35 per cent value addition in that country which will avoid routing of products made in China through Asean,” the note for the Kerala leaders said.
Acknowledging “the farmers of Kerala had also raised concerns” the note also says: “The Highly Sensitive List was created to provide modest reduction in the duties over a longer period of time (till 2019). Rubber plantations have also been provided protection by placing Natural Rubber in Negative List.”
The government managers also pointed out that the Framework Agreement of 2003 had provided for implementation of an Early Harvest Programme that would result in minimum elimination of duties. But India’s insistence on a tougher regime has ensured that the Early Harvest Programme was dropped.
The Congress central leadership also said that only India enjoyed a Negative List concept with the Asean. “India has maintained a large Negative and Exclusion list of 489 items, which includes 303 items of the agriculture sector, 81 of textile, 50 of auto and 17 items of the chemical sector,” the note said. It also underlines that “FTA is an international political commitment and is also a part of India’s Look East policy.”
During the Zero Hour in the Lok Sabha, K C Venugopal (MP from Alappuzha) raised this issue and said: “Farmers in India, especially in Kerala, have strong apprehensions about the Asean FTA.
Tea, pepper, coffee, coconut production will face a negative impact if this Agreement is signed. The government should clarify what will be the impact of FTA on our farmers.”
The CPI(M) also joined the Kerala Congress MPs over this issue. P Karunakaran, the party’s deputy leader, associated himself along with the Congress MPs.
