BY JESSICA ANNE D. HERMOSA, Reporter
August 7, 2009
Delayed trade pact expected to be signed next week
THE LONG-DELAYED signing of a free trade deal between the Association of Southeast Asian Nations (ASEAN) and India will finally push through next week, a Trade official yesterday said.
The Philippines and other ASEAN members along with India are scheduled to ink the pact on August 14 during an economic ministers’ meeting in Bangkok, Trade Assistant Secretary Ramon Vicente T. Kabigting told BusinessWorld.
The signing has twice been delayed: first in December 2008 when the ASEAN summit was cancelled following massive anti-government protests in host country Thailand, and again in February when India sought to renegotiate the schedule for tariff cuts.
As a compromise, the first round of tariff reductions will now occur in February 2010 instead of the original schedule of January 2009, Mr. Kabigting said.
"We thought to ourselves, there’s [a] malaise surrounding free trade deals anyway because of the crisis, so we don’t mind," Mr. Kabigting said.
The end date for tariff elimination for all goods under the normal track, meanwhile, has been moved to a year later as well, he said.
India will have to remove tariffs on 94% of its goods by 2018 while the Philippines will have do the same to 71% of its goods.
Asked to comment, Philippine Exporters Confederation, Inc. President Sergio R. Ortiz-Luis, Jr. said the deal has been awaited as India can be a valuable market.
Economists have projected that this Asian giant, along with China, would be among the few economies expected to grow this year despite the current global crisis.
"India is a market we are not maximizing. Somehow, this free trade agreement might open doors," Mr. Ortiz-Luis said in a telephone interview yesterday.
Philippine export sales to India accounted for less than one percent (0.39%) of the total sales to the world in 2008, central bank data show.
"It is really important that we are able to sign on to this. The Philippines is really behind when it comes to bilateral deals," Mr. Ortiz-Luis added.
Philippine exporters of automotive parts will have the opportunity to exploit India’s car manufacturing industry, he said. The garment sector, meanwhile, will also benefit from the deal as India can supply local manufacturers with duty-free textiles, Mr. Ortiz-Luis said.
In a related development, the Trade department said in a statement yesterday that it will be offering free seminars this month to help food and furniture exporters enter the Indian market.
One will be held at the Department of Trade and Industry’s International Building in Makati City on August 19 while another will be conducted at the SM Cebu Atrium on August 29. The Philippines’ commercial attache in New Delhi will be speaking at the briefing.