India, Chile agree to inch towards FTA

Written by ASHOK B SHARMA | New Delhi, March 17 | Updated: Mar 18 2009, 02:05am hrs
Chiles trade engagement with India is poised for a big leap with the two countries looking to transform the preferential trade agreement (PTA) in March 8, 2006 into a free trade agreement (FTA), the visiting Chilean President Michelle Bachelet said here on Tuesday.

Indian minister of state for external affairs and information and broadcasting, Anand Sharma echoed the same voice and said that on Monday in a meeting between Prime Minister, Manmohan Singh and Bachelet, it was agreed to move towards concluding a FTA between the two countries

India has entered the electoral process for electing a new Parliament and the present Prime Minister has, however told the ministries not to strike any international deal or FTA till the electoral process is over.

Addressing a seminar on Chile-India: Growing Business Opportunities and Cooperation, organised by the Embassy of Chile in association with three apex Indian industry bodies - FICCI, CII and Assocham, Bachelet said, the PTA between Chile and India, which has been in force since August 2007, has facilitated the growth in bilateral trade which reached $ 2.3 billion in 2008 from $ 300 million in 2004. The Chilean Government has decided to open a commercial office at its embassy in New Delhi this year, making the conditions ripe for doubling of the trade between the two countries in the next five years, she said.

Bachelet is leading a strong official and business delegation consisting of the countrys agriculture and economy ministers.

The two countries have agreed to enhance the periodic exchanges of business missions and participation in each others trade fairs to facilitate promotion of their respective countries products and services. Both sides have agreed to endeavor to double bilateral trade in the next five years.

Asia represents the main destination of Chilean exports. In 2005 36% of Chilean exports was to Asia. India was the fifth destination after Japan, China, South Korea and Chinese Taipei. In India-Chile bilateral trade the balance was heavily tilted in favour of Chile. Copper ores and concentrates, iodine, newsprint in rolls, fishmeal, roasted molybdenum concentrates and almonds were major items of Chilean exports.

Describing India as a priority country in Chiles Asia policy, Bachelet said, Chile offers to India bridge for trade with other Latin American and other nations. Chiles trade agreements with 56 nations, representing 90% of global GDP and 60% of the world population, would give India a large access to global markets.

Chile has been fast in striking bilateral and regional trade agreements. It has signed economic association agreements with EU and Pacific 4 group which consists of Brunei Darussalam, New Zealand, Singapore and Chile. It has signed FTAs with Canada, China, Colombia, EFTA group, Japan, South Korea, Mexico, Panama, Peru, United States and the Central American group covering Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. Chile has signed economic cooperation agreements with Bolivia, Ecuador, Venezuela and the Mercosur group. It has signed PTA with Cuba apart from that with India.

Both Chile and India have expressed interest in strengthening cooperation in new areas such as information technology (IT) and bio-technology in which India is regarded as a pioneer amongst developing nations. Both the countries emphasized South-South cooperation and vowed to fight protectionism in trade. Both the leaders said that the financial systems of both India and Chile were sound and these two economies can dive a direction for a new global financial architecture to help bail out from the recent crisis.

Indian minister of state for external affairs and information and broadcasting, Anand Sharma finally expressed confidence that going by the current trends in the growth of bilateral trade, it would be possible to double the trade volume in five years. The global economic crisis, he said, provided an opportunity to both the countries to seriously address the issues of bringing about a transformation in the global financial and political architectures.