Monday, October 27, 2008

Thai crisis set to delay Indo-Asean trade pact

27 Oct, 2008, 0335 hrs IST,Nirmala Ganapathy , ET Bureau

NEW DELHI: The ongoing political crisis in Thailand is putting question marks on whether the India-Asean free trade agreement will be signed at th
e end of this year. 

The India-Asean summit is to be held in Bangkok in December and the agreement is expected to be signed there. As speculation continues on whether the venue will be changed, Indian concerns are also centred around Thailand’s ability to complete the internal formalities for signing the agreement in the backdrop of the ongoing crisis. For Thailand, domestic approval, which is a requirement for each signatory, means the support of the parliament which has been disrupted. 

Thailand’s political troubles, which have now been going on for around two years, has deepened in the last couple of months. Prime minister Somchai Wongsawat, who is deposed prime minister Thaksin Shinawatra’s brother-in-law, is under pressure to step down. Due to his alignment with Mr Shinawatra, Mr Somchai, who assumed charge a month ago, has been unable to ease the confrontation with anti-government protesters who took over the prime minister’s office compound in August. 

Media reports said fears of a military coup have also been growing with the country’s Army chief blaming the prime minister for a violent crackdown on protesters. The conflict is now expected to deepen with the sentencing of Mr Thaksin, who is living in exile in Britain, to two years in prison on corruption charges. 

Analysts agreed the political turbulence in Thailand had the potential to disrupt the FTA timetable. “It’s not going to affect the FTA but it might delay ratification from the Thai side,” said Dr Shankari Sundararaman, associate professor at JNU’s Centre for South Central Southeast Asian and Southwest Pacific Studies. As far as the trade negotiations go, India had the least of problems with Thailand. 

Even though negotiations between India and the Asean are said to have concluded, there are still last minute hitches. Sources said problems have cropped up in finalising the agreed list with certain countries. This was confirmed by Indonesian ambassador to India Andi M Ghalib, who told ET that Indonesia wants India to reduce tariff on five items. 
“Indonesia’s problem is in five areas: tariff on crude palm oil, pepper, refined palm oil, tea and coffee. We want India to reduce tariff. For this we have reservations,’’ Mr Ghalib said. But, he said, the Indonesian government had no problem with continuing the discussion on these five items even after the India-Asean FTA was signed. “The good news is that the negative list keeps decreasing and decreasing. And by the time everybody is ready to sign, hopefully the number of items will be less,’’ he said. 

He said there was a will among the Asean countries to sign the FTA as soon as possible.

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