“Potential Mega FTAs like Trans-Pacific Partnership Agreement (TPP), the Trans-Atlantic Trade and Investment Partnership Agreement (TTIP) and EU-ASEAN Free Trade Agreement(EU-ASEAN FTA) which together account for more than 60 per cent of world’s GDP will severely damage economic aspirations of countries like India whose total trade (including exports and imports) to the negotiating countries accounts for more than 40 percent”, highlighted Venugopal Ravindran, Research Assistant, CUTS International during his presentation, in a stakeholder consultation meeting jointly organised by CUTS and Federation of Indian Exports Organisations(FIEO) in Chennai today.
Earlier, J.V.Patil, ITS, Joint Director General of Foreign Trade, Chennai, in his opening remarks articulated that awareness of these mega FTAs on the ground is still low and consultations such as this is helpful in understanding the challenges and opportunities for India vis-a-vis potential mega FTAs. He further opined that the Regional Economic Comprehensive Partnership (RCEP) is one of the alternatives which India could look at an alternative towards tackling the trade diversion emerging from the mentioned mega regional agreements.
The meeting titled “Mega FTAs and the Indian Economy: Impacts and Counter Measures” directed the attention of stakeholders about the changing dynamics of international trading system and sought discussion on mitigating strategy to be adopted by India at policy level in order to sustain the economic development and enhance further growth.
Archana Jatkar, Coordinator and Deputy Head, CUTS Centre for International Trade, Economics & Environment explained the purpose of the stakeholder consultation. She said it is being held to generate awareness among stakeholders as well as to obtain their specific inputs. She noted that Mega FTAs are trying to set benchmark and raise the standards on various issues such as Sanitary and Phyto Sanitary Measures (SPS), Competition, Government Procurement, Labour & Environmental Standards, which are generally known as WTO plus arrangements. Such a raised standard imposed would then make it imperative for countries like India to adhere to standards and lead to build their capacities in near future.
T.S.Vishwanath, Principal Advisor, APJ-SLG Law Offices set the tone of the discussion by throwing light on the WTO since its inception in 1995, in order to better explain the current geo-economics of the international trading system. He opined that there is growing need or India to integrate its industry into regional and global value chains thereby moving the exports up the value chain so also to address the challenge of increased standards both at domestic and international market. He further deliberated on number of issues such as the Rules of Origin and the compliance required thereof. He noted that there is a great potential for India to look at Africa as a new export destination besides the existing look East India policy.
The discussions further revolved around the issues of standards relating to SPS and Technical Barriers to Trade (TBT) including those related to Intellectual Property Right (IPR), Labour, Government Procurement and Environment and how they will affect the Indian industry vis –a-vis the mega regional agreements of TPP, TTIP and EU-ASEAN FTA.
The meeting noted that the discussion in the context of FTAs need to go beyond tariff as they eventually will go down as an outcome of number of available and negotiated FTAs. The need is to focus on competitiveness enhancement measures across sectors and products.
Somi Hazari, Managing Director, Shoshova Group of Companies suggested that before going to access new markets and negotiate FTAs, businesses are required to work out their investment preferences and delist sensitive products in order to avoid delays and confusions. FTAs are signed in good faith so one has to be fair and avoid malpractices such as trade mis-invoicing under FTA routes, he further opined.
Participants underscored the need for increased role of Bureau of Indian Standards Act (BIS) and Food Safety and Standards Authority of India (FSSAI) in order to tackle the regulatory and standards related issues. Participants held the view that besides focusing on bilateral trade agreements in the TPP, TTIP and EU-ASEAN region, India could further intensify its engagement through RCEP, invest in trade related institutions like BIS, focus on knowledge dissemination and capacity building programme to create an informed trading community in India.
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