NEW DELHI: Allaying industry’s concerns over free trade agreements, the Commerce Ministry today said these have now become an essential part of the global trade and the businesses should focus at ways to utilise these pacts for their benefit.
“How can we make these FTAs useful…these FTAs are not fully utilised, we need to utilise these agreements. How should we utilise these FTAs to benefit us. We cannot continue take an approach that FTA was bad,” Commerce Secretary Rajeev Kher said here at a Ficci function.
Industry chambers and exporters have raised concerns over these pacts saying that these are benefiting more to the partner countries with which India has implemented FTAs.
India has so far entered into FTAs with Japan, Singapore, South Korea, Malaysia, Asean and South Asia.
Kher said that in today’s globalised world India cannot keep it isolated from these arrangements.
Citing example of the ongoing negotiations for Regional Comprehensive Economic Partnership (RCEP), he said: “if you are talking of major economies in Asia and Australia coming together and India not being part of it that could have been an unthinkable situation”.
“We look at RCEP as an opportunity which will offer us avenues to become more competitive,” he said.
The 16-member RCEP comprises 10 Asean members and its six FTA partners namely India, China, Japan, Korea, Australia and New Zealand. The 16 economies account for over a quarter of the world economy. RCEP negotiations were launched in Phnom Penh in November 2012.
“You have Korea, China and Japan (in RCEP) and they are major manufacturing economies. Negotiations are going fast. So the point is that how well we are prepared to harness RCEP. Now that is a big challenge. We need to work.
“RCEP is contemplated for conclusion for the end of next year, therefore the time frame is not big. Within two years, we have to shape up. Industry has to address this challenge,” he said.
He informed that the commerce ministry is talking to all the relevant government departments that reforms are necessary for the pact.
“…beacuse if you become a member of RCEP, then we had it and therefore we need to carry out all those reforms which are necessary for making ourselves competitive or retaining our competitiveness. Now this is something which is a big challenge,” the secretary added.
He said that major developed countries like the US are engaging in mega regional trade deals and India should become part of that.
He said that India’s export competitiveness and destinations may erode when regional trade deals such as the Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP) come into force.
“The moment TPP will be concluded, we will face a significant erosion,” he said.