India, Asean try to iron out trade deal before summit

Agreement likely by December 20

India and Association of Southeast Asian Nations (Asean) may conclude talks on the much-awaited Free Trade Agreement on services and investment next week, as the negotiators are trying to narrow down differences on certain contentious issues before Prime Minister Manmohan Singh hosts the trade bloc leaders in New Delhi for a special summit.

Negotiators of India and Asean are likely to hold final rounds of talks ahead of the summit being held on December 20 and 21 to mark the 20th anniversary of New Delhi’s ties with the 10-nation bloc. They are expected to thrash out differences on the issues like movement of “natural persons” and exclusion of intellectual property from definition of investment.  “We expect that the India-Asean services and investment deal will be concluded by the time we have the summit,” Rajiv Kher, additional secretary in the Ministry of Commerce and Industry.

India and Asean signed Trade in Goods Agreement on August 13, 2009 and the deal came into effect with all the 10 countries by the middle of last year. New Delhi has since long been also engaged in negotiations on a proposed Agreement on Trade in Services and Investment Promotion with the Asean.

Kher said that the two sides had almost reached agreement for trade in services, while differences “on a couple of issues” related to investment were expected to be resolved soon. India-Asean trade touched $80 billion in 2011-12, recording a growth of 29 per cent over the previous years.

“The momentum of this relationship is so high that the target $150 billion mark does not seem too distant. Further, an early conclusion of the Asean-India agreement on services and investment would give a fillip to trade and investment,” he said.

Highly-placed sources told Deccan Herald that one of the unresolved issues was the way investment to be defined in the agreement. Asean wanted the definition should include intellectual property, but New Delhi was not ready for it. Besides, India also expected the Asean to be more accommodative on the issue of movement of “natural persons” in the pact on trade in services, they added.

Kher, however, said that both sides had “shown flexibility” and all differences were expected to be resolved before the summit.

Negotiations on the Asean-India agreement on services and investment hit a roadblock last month. Malaysia, which is leading Asean in the talks had said it might take longer to ink a deal.