Even with the Prime Minister embarking on a three-day visit to Japan to strengthen bilateral trade ties and energy partnerships between the two countries, the prospects of concluding the India-Japan comprehensive economic partnership agreement (CEPA) any time soon are still bleak. According to official sources, though some progress was made in the last round of CEPA negotiations held in Tokyo earlier this month, fresh bottlenecks have sprung up in the form of Japan’s sustained unwillingness to open up its pharmaceutical sector to drugs manufactured in India and it could be at least another five-six months before an agreement is reached on these issues.The CEPA is a comprehensive free trade agreement aimed at reduction or elimination of tariffs in bilateral trade of both goods and services as well as facilitation of foreign investment between the two countries. The issues that have been on the forefront for India are sanitary and phytosanitary (SPS) measures used in Japan for testing imported goods and technical barriers to trade (TBTs).However, in the last round of talks held two weeks ago, Japan and India successfully finalised the text for SPS measures and TBTs — a first for any developing country involved in bilateral trade talks with Japan. Though the text includes a special article on generic medicine, it mostly pertains to only exchange of information whereas India’s interests are more in streamlining the entire export process. “At the moment, it takes an Indian pharmaceutical exporter five to seven years to start exporting from the date of application. We’re trying to bring this down to one year,” the official said.Japan is also not agreeing to a mutual recognition arrangement (MRA) in pharma, which would enable both the countries to identify the testing procedures and standards used in the other country for their goods. India’s demand is to have standards uniform to those set by the US Food and Drug Administration, but Japan contends that these are not enough and is resolutely pushing for its own set of testing measures. Japan has, however, showed interest in having MRAs in telecom and electronic equipment.Another stalemate is that in services. India has requested Japan to open up trade in healthcare and banking, which Japan is not ready to do and does not appear willing to change its stance soon either. In goods, Japan has asked India to open up its auto-components sector, which, after discussions with the domestic industry, India has not acceded to. The two countries have, however, finalised their respective negative lists (items excluded from tariff elimination) with 50-80 items in each list.
