Diplomatist Magazine Diplomatist April 2018 - Page 10

COVER STORY The JWG observed that the present policy regimes in both the countries are quite conducive to more intensive bilateral economic integration and an FTA could prove to be a building block for other sub-regional, regional, and global economic integration processes. Having observed the rich potential of trade expansion, the study concluded that the proposed FTA between India and Thailand is feasible, desirable, and mutually benefi cial. Accordingly, a joint negotiating group was set up to draft the framework agreement on the India– Thailand FTA. The framework agreement for establishing an FTA between India and Thailand was signed on 9 October 2003 in Bangkok. The key elements of the framework agreement cover FTA in goods, services and investment, and areas of economic cooperation. The framework agreement also provides for an early harvest scheme (EHS) under which common items have been agreed for elimination of tariffs on a fast-track basis. The early harvest items cover 82 products for exchange of concessions between India and Thailand and were implemented with effect from 1 September 2004. The two countries could not reach a consensus on issues by June 2015 related to FTA in goods. India-Chile Framework Agreement on Economic Cooperation: A framework agreement on economic cooperation which was signed between India and Chile on 20 January 2005 envisages a PTA between the two countries. The negotiations on the PTA were concluded and the agreement was signed in March 2006. India has offered to provide fi xed tariff preferences ranging from 10 to 50 percent on 178 tariff lines to Chile while the latter has offered tariff preferences on 296 tariff lines with a margin of preference ranging from 10 to 100 percent India–MERCOSUR PTA: A PTA was signed with an aim to expand and strengthen existing trade relations between India and MERCOSUR by granting reciprocal fi xed trade preferences with the ultimate objective of creating an FTA. The PTA consists of fi ve annexures, signed on 19 March 2005, including an offer list of India, rules of origin, safeguard measures, and dispute settlement procedures. In November 2006, preliminary discussions were held in New Delhi to work out the modalities for future negotiations. India has offered to provide tariff preferences ranging from 10 to 100 percent on 450 tariff lines to MERCOSUR with the latter having offered tariff preferences on 452 tariff lines with a margin of preference ranging from 10 to 100 percent. India-ASEAN FTA: ASEAN- India Free Trade Agreement in Goods was enacted in 2010. In a bid to include the service sector which is India's core strength, the ASEAN-India Agreements in Service and Investment came into force on 1 July 2015. The FTA was supposed to be a sound strategy as India's service-oriented economy would perfectly complement ASEAN countries' manufacturing-based economies. ASEAN nations along with India constitute a population of about 1.8 billion with a combined GDP of $2.8 trillion. In 2014-2015, the annual trade between India and ASEAN nations stood at approximately $76.53 billion, however during 2015-2016, the annual trade declined to about $65.04 as a result of the sluggish global economy that led to a fall in commodity prices across the globe. Despite this fall in trade, ASEAN is India's fourth largest trading partner with 10.2 percent of total share in India's global trade. The bilateral investment fl ows have been sound with ASEAN accounting for 12.5 percent of the investment fl ows in India since 2000. 8 • Extraordinary and Plenipotentiary Diplomatist • Vol 6 • Issue 4 • April 2018, Noida