Indo-ASEAN trade pact to be reviewed soon

AHMEDABAD: After a lot of dilly-dallying, the Association of South East Asian Nations (ASEAN) has agreed to review the Comprehensive Economic Cooperation Agreement (CECA) signed with India. After months of inaction, the Indian government has threatened to pull out of the agreement if nothing is done soon.

The main cause of concern is how China was misusing the treaty to ship goods to India, and that India was not able to take full advantage of this 10-year-old agreement.

While the review of this agreement is in the works, India is keen to fix some of the anomalies of this agreement. One of the main causes of concern is the lack of level-playing field for access to markets in the region. For example, Indonesia has only lowered duties on 50% of the items agreed upon in the agreement, while more than 75% of its products were getting customs duties benefits in India. Thailand charges 5 percent tariff on Japanese automobiles, while their Indian counterparts pay a whopping 35 percent tariff.

Another key concern was the weak rules of origin that gives undue benefits to countries that aren’t part of the deal. For example, the Chinese export copper, polyester and set-top boxes to India via any ASEAN member country.

The Government also wants better Custom procedures to verify the origin of products, which is currently unavailable.

The current government criticizes the previous UPA government who signed the CECA in haste and aims to bargain hard for the best deal with ASEAN.

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