Sitharaman cancels Myanmar trip at last
moment citing launch of Modi's Jan Dhan Yojana
India
has bucked another trade pact. On Tuesday it put off the free trade agreement
that was to be signed with the 10-member Association of Southeast Asian Nations
(Asean) in services and investment. The move came even as the country was
already facing sharp criticism in the international trade arena for scuttling
the World Trade Organisation's (WTO's) Trade Facilitation Agreement.
Minister
of state (independent charge) for commerce and industry Nirmala Sitharaman was
supposed to be here for three days of consultation with the Asean economic
ministers. On the agenda was the signing of the trade agreement in services, as
well as investment.
The
signing ceremony was to happen at the end of the second day at the Asean
economic ministers meeting here. The stage was set, and so was the audience,
including media, from all the 10 Asean countries, to witness the signing of the
agreement that was long due. However, at the very last moment, Sitharaman
cancelled her trip and decided not to attend the meeting.
According
to Ravi Capoor, joint secretary in the commerce department, the minister was
not able to come due to "domestic compulsions", since she had to be
present on August 28 for the launch of the Pradhan Mantri Jan Dhan Yojana, a
financial-inclusion scheme through which the government intends to provide
every household with a bank account and insurance cover. Sitharaman has been
made incharge of this scheme.
Capoor
added the Philippines Parliament had not yet ratified the deal. Asean comprises
Singapore, Malaysia, Laos, Cambodia, the Philippines, Brunei, Vietnam, Myanmar,
Thailand and Indonesia.
Sitharaman
on Tuesday posted on microblogging site Twitter: "PM to launch Mega Scheme
for financial Inclusion - an ambitious scheme - at least one bank
account/family... Unfortunately, had to cancel attending Myanmar AEM
meet."
However,
it is learnt the National Democratic Alliance government, which came to power
in May, did not want to take a chance by signing the trade pact so early in
office. The deal was negotiated and agreed upon in December 2012 under the
United Progressive Alliance government regime. As a result, the government did
not want to sign the deal in haste before analysing the pros and cons,
officials told Business Standard.
India
and Asean already have a free trade agreement (FTA) in goods that got
implemented from January 2010. This, too, has not been ratified by all Asean
members. India had come under scathing attack over the deal for not being able
to increase its exports, while imports from most of the Asean member states
like Singapore, Malaysia, Thailand and Indonesia kept rising.
Once
signed, the FTA will automatically get converted into a Comprehensive Economic
Partnership Agreement (Cepa), encompassing trade in goods, services and
investment.
Since
the talks began, the Philippines and Indonesia were apprehensive of India
eating away their jobs market. Under the services deal, India had been pushing
for more leeway in Mode 4, which refers to the movement of professionals in
trade parlance.
Besides,
another problem is that while countries like Thailand and Malaysia are ready to
give greater access to their services market to India, they are not keen to
give the same leverage to other Asean members.
According
to officials in the commerce & industry ministry, India was able to gain
significantly in services trade when it established a trade agreement with
Malaysia separately compared with what it got under the larger Asean agreement.
Under
the goods FTA, Asean member countries and India had decided to lift import
tariffs on more than 80 per cent of traded products by 2016. The FTA
collectively covers a market of nearly 1.8 billion people and proposes to
gradually slash tariffs for over 4,000 product lines.
Nayanima
Basu
Business & Investment Opportunities
Saigon Business Corporation Pte Ltd (SBC) is incorporated
in Singapore since 1994.
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