Expecting free trade by 2008: ASEAN to India

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The 10-nation Association of Southeast Asian Nations (ASEAN) expects to sign a free trade agreement with India by the middle of next year, the chief of the grouping said on Tuesday.

The comment reflects ASEAN's caution about whether differences over concessions by India can be ironed out in time for a summit in November, following an upbeat assessment by India's top trade official this week.

Ong Keng Yong, secretary-general of ASEAN, said the gap between the negotiating positions of the two sides made efforts to reach agreement difficult, but he hoped the November meeting would give political impetus to the talks.

"We're hoping to have some agreement for leaders at this coming summit in Singapore," Ong told reporters in the Malaysian capital. "It's not easy, because of the gap that's still there, but we hope to get some political momentum."

In Manila this week, Indian Commerce Secretary Gopal Pillai said the agreement was almost 98 percent settled, though he did not say what issues needed to be ironed out.

"We hope to sign it at the ASEAN summit in Singapore in November," Pillai told Reuters in an interview on the sidelines of an ASEAN trade meeting.

ASEAN officials have previously said India needs to agree to take out petroleum products from a sensitive list of goods whose tariffs will not be eliminated.

Besides petroleum, India wanted palm oil, coffee, tea and pepper to be treated as a special case, Ong said.

"They say their concern is that these five products are critical to them and they cannot give concessions to ASEAN," he added. "Our argument is that these five products represent a lot of our trade with India, and if you don't want to give it to us, then what's the point of doing an FTA?"

Rules of origin were another issue being hammered out in the talks, with a further round scheduled for September, Ong said.

"We're hoping for our leadership to talk down to us, the bureaucratic level, to narrow the gap at the summit, and then from there we'll go into real substantive bridging of the gap and then we get it ready by latest July next year," Ong added.

ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.