Commerce Minister Kamal Nath did some clever trade jugglery on Friday, by spending a day away from the WTO negotiating table at Geneva and showing up in Bangkok to firm up the Free Trade Agreement (FTA) with Thailand, where Prime Minister Manmohan Singh is on a three-day visit.
But even as he was sitting down to address the Indian media delegation on the breakthrough on the duty free pact with Thailand, he was informed of the latest problem that had cropped up in Geneva. ‘‘No, we cannot agree to another change in the letter,’’ he said firmly on his cell phone, even as he walked out of the briefing room. He returned in a few minutes to make the announcement on FTA and said he was returning to Geneva the same night.
Despite the UPA hinting that the previous regime had gone on trade pact signing binge and Manmohan Singh’s assertion that he would personally be giving a hard look to the issue, today’s agreement with Thailand to have a duty free fact with for trade in 82 items is significant. Kamal Nath pointed out that the delay had been on account of switching of one or two items on the list of 82 and the reservations of the Thai side that they would have had to sign a separate agreement with each State Government, just as they had done with China.
The formal signing of the India-Thailand FTA agreement will take place next month between the two Commerce Ministers.
What has been announced today is that there would be a staggered ( 50-75%) reduction of duties on the listed items over the next two years and a complete removal of all tariffs by September 2006.
Some of the items which figure on the list of 82 vary from grapes, to crabs, to diamond dust, ball bearings and gear boxes. Kamal Nath also indicated that India has assured their Thai counterparts that the problems they faced after they signed their FTA would not reoccur with India.
On the WTO front, Kamal Nath was candid about admitting that India’s tight-rope walk in Geneva over agricultural products and produce would continue. In the WTO, we don’t agree, we only consult,’’ is what he told The Indian Express before taking off for Geneva. He said during one round of consultations on the issue of sensitive products he had to walk out of a WTO meeting.
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He also admitted that it was the prickly problems of Aggregate Market Support (AMS) and the amber box formulae being postulated by the US, that India was objecting to. The position being taken by India is as a developed country, the US should have a more drastic reduction of subsidies to agriculture. Secondly, EU had agreed to reduce subsidies to a nil level, the US had asked for a slow pace of reduction, necessitation from India’s viewpoint a redrafting of the proposed WTO agreements.
