INDIA, JAPAN SET OUT PARAMETERS FOR FTA NEGOTIATIONS
Senior officials from India and Japan wrapped up the first round of negotiations on a bilateral free trade agreement (FTA) on 2 February in New Delhi, setting out a framework for the prospective deal. They are aiming to conclude talks within two years.
The two sides agreed that the parameters for a Comprehensive Economic Partnership Agreement (CEPA) would include trade in goods and services, trade promotion, the facilitation and liberalisation of investment flows, and measures for promoting economic cooperation in identified sectors. They decided to set up four working groups tasked with formulating an accord in these areas.
Japan finally agreed in December 2006 to include its heavily-protected agriculture sector in a future agreement, removing the final hurdle to starting negotiations.
The trade pact is part of a broader partnership agreement, signed on 2 February, which calls for annual summit meetings, institutionalised strategic dialogues between foreign ministers, youth exchanges, and cooperation in the fields of energy, environment, anti-piracy, and non-proliferation. Additional deals aimed to promote Japanese investment in India.
Indian Prime Minister Manmohan Singh stressed the shared values and interests of the two countries before a trip to Tokyo in December. "India and Japan are the largest and the most developed democracies in Asia. We share a strong commitment to freedom, the rule of law and respect for human rights," he said.
Progress towards an FTA started in April 2005 when a joint study group was launched to explore the possibility of a bilateral agreement. That committee concluded its work in 2006 with a recommendation to start negotiations.
Both sides believe the current bilateral trade volume, USD 6.8 billion in 2006, is far below potential. The second round of negotiations will be held in April 2007, in Tokyo.
ICTSD reporting; "Agriculture included in proposed India-Japan EPA," CENTAD, 6 December 2006; "India-Japan Negotiations on trade pact," CENTAD, 2 February 2007; "Highlights of documents signed between India and Japan," THE HINDU, 17 December 2007. "Japan-India Relations," THE MINISTRY OF FOREIGN AFFAIRS OF JAPAN, January 2007; "First round of negotiations on the Japan-India economic partnership agreement," THE MINISTRY OF FOREIGN AFFAIRS OF JAPAN, 26 January 2007.