In a bid to put pressure on Asean, which has been going slow on the proposed bilateral services and investment agreement, Delhi is likely to link signing of the agreement to the initiation of formal negotiations on the ambitious Regional Comprehensive Economic Partnership (RCEP). The initiative seeks to create a free trade bloc in the Asia-Pacific region covering the Asean and its six partner countries including India, China and Australia. "India wants the pending services and investment agreement with Asean to be tied up before it goes in for more trade pacts in the region," a commerce department official told ET. "We have learnt it the hard way by agreeing to seal the India-Asean FTA in goods first and would not like to repeat the mistake."
The Asean includes Cambodia, Brunei, Myanmar, Malaysia, Philippines, Thailand, Singapore, Vietnam, Laos and Indonesia.
India and Asean implemented a free trade agreement in goods in January 2010 and were supposed to conclude a similar pact in services and investment by the end of 2010. The Asean has been dragging its feet on the issue for over three years as a services and investment agreement is likely to benefit India disproportionately as it has a strong services sector. Indian professionals in a number of sectors including teaching, nursing, accountancy, architecture and health are expected to benefit from a services agreement.
"Asean has to remember that it had initially set off to sign a comprehensive agreement with India that would have included goods, services and investment. India had agreed to sign the goods agreement first out of goodwill and on the promise that agreements in services and investment would follow soon," the official said. The India-Asean FTA in goods has already delivered results with bilateral trade touching $80 billion in 2011-12, a growth of 37% over the previous year.
Asean is now keen to enter into a comprehensive economic partnership with its six partner countries that includes India, Australia, China, New Zealand, Japan and South Korea, to create an integrated market in the Asia-Pacific region with a population of over 3 billion and a combined GDP of over $17 trillion.
The RCEP, seeks to incorporate commitments for opening up markets in goods and services that go beyond the FTAs Asean has signed with its six partners.
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1 Comment on this Story
Yee Peng Kong KMN2942 days ago
Open Asia Market
Under Regional Comprehensive
To Spur Greater Trade
And Investment Flow?