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Comprehensive Economic Cooperation Agreement Between India And Association of Southeast Asian Nations (ASEAN)

Comprehensive Economic Cooperation Agreement Between India And Association of Southeast Asian Nations (ASEAN)

Answer: ASEAN and India signed a Framework Agreement for Comprehensive Economic Cooperation Agreement (CECA) on October 8, 2003. In 2003, only the goods trade was negotiated at the first instance and the services and investment trade is under negotiation. Under the Framework Agreement ASEAN and India agreed to negotiate a Free Trade Agreement covering trade in Goods, trade in Services and Investment. The complete details are available at http://commerce.nic.in/trade/international_ta_indasean.asp
Answer: India and the ASEAN (Association of South East Asian Nations) comprising Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam signed the Trade in Goods Agreement under the broader framework of Comprehensive Economic Cooperation Agreement (CECA) between India and the ASEAN on 13 August, 2009.
Answer: The India-ASEAN Agreement on Trade in Goods came into force on 1January 2010 in the case of Malaysia, Singapore and Thailand; 1June, 2010 for Vietnam; 1September, 2010 for Myanmar; 1October, 2010 for Indonesia; 1November, 2010 for Brunei; 24January,2011 for Laos; 1June,2011 for Philippines; and 29July, 2011 for Cambodia. The last period for tariff reduction or elimination under the various tariff categories like normal tracks 1 & 2, sensitive track and highly sensitive track (HST)/special products would be 2019 for ASEAN non LDCs barring Philippines; 2022 for Philippines; and 2024 for all LDCs like Cambodia, Lao PDR, Myanmar and Vietnam.
Answer: Tariff concessions are offered either through (1) tariff elimination or (2) tariff reduction. The List of items for which • tariffs are to be eliminated (including through phasing out periods) is called the Normal Track, • tariffs are to be reduced to 0% and 5% is called the Sensitive Track and • tariffs are to be reduced to certain pre-determined levels is called the Highly Sensitive List/Special Products.
Answer: The Agreement will eliminate tariffs on 80% of the tariff lines accounting for 75% of the trade in a gradual manner starting from 1st January, 2010. Considering domestic sensitivities, India has excluded 489 tariff lines(HS6 Digit level) from the list of tariff concessions and 590 tariff lines from the list of tariff elimination to address sensitivities in agriculture, textiles, auto, chemicals, petrochemicals, crude and refined palm oil, coffee, tea, pepper etc. ASEAN countries have also maintained country wise exclusion list from the proposed tariff concessions or eliminations.
Answer: India’s Schedule of Tariff Commitments consists of 40 items placed under Special Products. This is also referred to as India’s Highly Sensitive List. These items belong to 5 products namely Crude Palm Oil (CPO), Refined Palm Oil (RPO), coffee, pepper and tea.
Answer: Exclusion List or Negative List is a list of all items on which no tariff concessions/ any other form of barrier reduction have been offered by individual Parties. The India-ASEAN Trade in goods agreement uses the term EL (Exclusion List) which in common parlance is referred to as Negative List.
Answer: Key items in India’s Exclusion list are: Vegetables – Tomato, onion, garlic, ginger, carrot, radish, cauliflower, cucumber, peas, beans, chilli, capsicum, potato, etc Fruit/Nuts – coconut, copra, cashew kernel, areca nut, betel nut, banana, pineapple, guava, mango, oranges, grapes, raisin, apple, lemon, watermelon, papaya, cherries, etc Spices – chilli powder, nutmeg, vanilla, cardamom, fenugreek, coriander seeds, cumin, turmeric, mustard seeds, poppy seeds, etc Cereals/Grains – rice, wheat, maize, sorghum, jowar, bajra, ragi, malt, etc Oilseeds/Oils – soyabean, groundnuts, linseed, rapeseed, sunflower seed, soya oil, groundnut oil, sunflower oil, coconut oil, etc Fish/Fisheries – Trout, Sole, Tuna, Herring, Cod, Sardine, Mackerel, Hilsa, Dara, Seer, Pomfret, Cuttlefish, Shrimp, Prawn, Crab, Lobster, processed Tuna, Caviar, etc Others – natural rubber, tobacco, roses, carnations, orchids, milk, butter, ghee, natural honey, starches, sugar, jaggery, tapioca, etc. Textiles – Woven Fabrics of Cotton including dhoti, saree, shirting, casement, upholstery, etc, polyester yarn, certain synthetic fabrics of filament yarn, etc. Auto – Cars, buses, 3-wheelers, lorries, trucks, chassis, brakes, clutches, silencers, safety belts, etc Petroleum Products – Kerosene oil, Diesel, Aviation Fuel Chemicals – Zinc Oxide, Red Oxide, Distemper, Herbicides, Disinfectants, etc.
Answer: Owing to the commitment under the Framework Agreement, India and Philippines have a different time-line for tariff liberalization compared to India and other ASEAN countries. Therefore, India has one Schedule of Tariff Commitment for Philippines and another for the rest of the ASEAN Member Countries. However, but for the timelines, the tariff reduction/elimination offers are identical in both the Schedules.
Answer: India-ASEAN negotiations were concluded using lists of tariff lines at HS 6- digit level. Thereafter, all Parties agreed to convert the offers to their respective national levels which, for instance, is 8-digit for India, 9-digit for Malaysia, 10-digit for Indonesia, etc. Hence, the offers are at 8/9/10-digit levels.
Answer: The products under the India-ASEAN TIG Agreement must meet the triple criteria of (i) tariff classification change (change in tariff sub-heading, CTSH), (ii) regional value addition i.e., the ASEAN-India Free Trade Agreement (AIFTA) content of not less than 35% of the Free on Board (FOB) value and (iii) substantial manufacturing/processing excluding minimal operations like repackaging, simple assembly/disassembly of parts, etc. The origin is proved by a Certificate of Origin at the time of import declaration. For exporters from India, the Certificate must be issued at the time of exporting the good in order to certify that the product originates in India. Ministry of Commerce & Industry authorises certain agencies to issue Certificates of Origin for Indian exporters.
Answer. No. The India-ASEAN Trade in Goods does not allow such products through the mechanism of Rules of Origin. The Agreement has built-in protections to ensure that no third country product enters Indian market and benefit from concessional tariffs without being substantially transformed. These protections are: A product is considered originating from an ASEAN country if it is a wholly obtained product of that country (generally in case of agricultural products). This rule out third country products. However, if a product uses some of the third country imported inputs, it will be considered only if: (a) the AIFTA content is not less than 35% of the FOB value; and (b) third country materials have undergone at least a change in tariff sub-heading (CTSH) level of the Harmonized System. The agreement has a rules of origin with twin criteria’s of change in tariff sub heading (6 digit transformation) and value addition. Further, it allows for regional cumulation.
Answer: Yes, there are safeguard mechanism to protect the domestic producers against any sudden surge in imports due to tariff concessions that would substantially cause or threaten to cause serious injury to the domestic industry has been included in the Trade in Goods Agreement. A Party shall have the right to initiate a safeguard measure on the imports of a good from the date of entry into force of this Agreement and up to 5 years from the last date of tariff reduction. As a safeguard measure, a Party can suspend the further reduction of any tariff rate or increase the tariff rate on the good concerned to the applied MFN tariff rate level of 1st January 2010 and maintain this protection for a period of up to four years.
Answer: The concept of review of the Agreement has been put in place to take stock of the operation of the Agreement and based on this suggest the future course of action. The Agreement is operationalised and implemented through a Joint Committee. The Joint Committee meets biennially to review the Agreement with a purpose of considering additional measures to further enhance the Agreement.
Answer: The parties shall resolve dispute through consultations and negotiations ,failing which they may resort to an arbitral panel, which shall consist of three members. Each party to the dispute shall appoint a member and the third member who would be the Chair of the panel, shall be appointed by mutual agreement.
Answer: Some of the product categories of export interest to India on which the major ASEAN countries are eliminating their tariffs are: • Indonesia: marine products, fruits and vegetables, cereals (excluding rice), processed food, organic chemicals, pharmaceuticals, textiles, machinery etc. • Thailand: processed food, organic chemicals, pharmaceuticals, textiles and clothing, footwear, machinery, automotives etc • Malaysia: marine products, fruits and vegetables, processed food, petroleum products, organic chemicals, pharmaceuticals, textiles, clothing, footwear, machinery etc.

 


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