Cepa with Japan put on fast track after standoff

Written by Arun S | Vikas Dhoot | New Delhi, Apr 26 | Updated: Apr 27 2008, 07:09am hrs
The India-Japan compre-hensive economic partnership agreement (Cepa) has been put on fast track with Tokyo returning to the negotiation table after a four-month standoff. Japan has now reconsidered its position to accommodate Indias viewpoint on commitments towards reduction in tariff lines.

Indian officials were invited to Tokyo in mid April to resume talks and the next bilateral meeting will take place in New Delhi on May 12. The aim now is to complete the talks by this year-end and increase bilateral trade to $20 billion by 2010.

The development comes in the backdrop of China dragging its feet over a trade pact with India. Negotiations scheduled for April were postponed after New Delhi strongly expressed its annoyance over Beijing dilly-dallying on dates for a meeting between commerce and industry minister Kamal Nath and his Chinese counterpart.

Concerned over Beijings growing clout, Japan has been taking a more pro-active approach to firming up trade pacts with several countries, including India, and signed a free trade pact with Asean last August.

India is also negotiating an FTA with Asean.

Negotiations between India and Japan had begun after the Prime Ministers Tokyo visit in 2006. It hit a roadblock last year after Japans insistence that both sides reduce equal number of tariff lines while India wanted a 5% difference in commitments. Japan has now agreed to the demand and the two sides have exchanged their negative lists. It has also agreed to Indias persistent demand to set up a special mechanism to sort out complaints on the Asian giants non-tariff barriers (NBT). Apart from language barriers, Japans strict approval procedures, especially for sectors of interest for India such as pharmaceuticals and textiles, are the biggest impediments. Currently, the US is the dominant supplier of pharma products in Japan.

Not just India, the rest of the world, including developed countries, feels that Japan is very finicky about quality, an official said.