Politics likely to delay India entry into Asean

India is citing the fear of political fallout and its suicide epidemic among farmers as obstacles to hammering out a free-trade deal with Southeast Asia, officials said. The agreement between India and the 10-member Asean is scheduled to come into force on January 1, ‘07, but negotiations have stalled over the list of mostly agricultural items to be exempted from tariff cuts. A senior official said that as an agricultural country, India was concerned over the prospect of political fallout from rural voters if it opens its markets. “The suicide level is high. The government is worried. It is an agricultural country. Politics is the issue,” he said. Indian federal officials said earlier this year that more than 8,900 farmers had committed suicide since ‘01 in four states hardest hit by the ongoing agricultural crisis. Ramon Vicente Kabigting, a director at the Philippines’ department of trade and industry, said he told his Indian counterpart last March that it should not use the suicide argument in the Free Trade Agreement (FTA) talks. “I dare not measure human suffering. All I know is that everyone around this table respects human dignity,” he said. “It is not an argument that is right to be used in an FTA,” he said. The ASEAN official said that India must cut its proposed exclusion list during talks with the region’s economic ministers here next week. ”FTA negotiations with India are stuck. There is no real movement,” he said on the sidelines of a meeting of ASEAN senior officials. “They should not have a long list of exclusions.” The number of products excluded from tariff reductions has been cut to 854 from the 1,414 India had originally proposed, but is still far higher than ASEAN’s target of 400. India, which adopted a free market economy in the early ’90s, is keen to expand trade ties with ASEAN, but wants to protect its own sensitive sectors, such as agriculture and textile which provide livelihoods to millions of Indians. Among the items on the exclusion list are imports of palm oil from Malaysia and Indonesia, and of tea and coffee from other ASEAN countries. Malaysia and Indonesia produce about 80% of the world’s supply of crude palm oil.

[source:http://economictimes.indiatimes.com/articleshow/1902474.cms, Jumat, Agustus 18, 2006 12:29:53 AM]