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The mother of all
FTAs
NEW DELHI - Riding on
a 79% growth in bilateral trade in 2004 at US$14
billion, China has expressed an interest in
formulating a free-trade agreement (FTA) with
India, saying that closer trade relations could
make it easier to solve political differences. If
the FTA is achieved, it would result in the
biggest free-trade region in the world.
"We have received support from all
relevant departments for an FTA with India. We
want to start discussions ... It is for India to
take a decision," Sun Yuxi, China's ambassador to
India, said on the sidelines of a Federation of
Indian Export Organizations meeting recently.
"There is still a lot for us to do to further
enhance bilateral trade and economic cooperation.
I believe closer trade relations will make things
easier for solving some political issues ... Trade
between India and China has increased seven times
in five years. It can increase to $35 billion by
2010, even if a modest 20% growth is maintained."
Sun said the FTA issue is likely to be
raised by Chinese Premier Wen Jiabao when he
visits India next month. During the recent meeting
of the joint study group on closer economic
cooperation between India and China in New Delhi,
Sun said the Chinese representatives in the group
had advocated going for an FTA. The study group
was constituted on the basis of the first
India-China Joint Declaration signed during former
prime minister Atal Bihari Vajpayee's historic
visit to Beijing last June. The joint study group
comprises officials and economic experts from the
two countries mandated to study ways to expand
bilateral trade and economic cooperation and draw
up a five-year plan for Sino-Indian trade and
economic development. According to the Chinese
envoy, the two governments aim to finalize the
five-year plan by the end of the month. It will be
announced during the Chinese premier's forthcoming
visit.
Upbeat over the growth in bilateral
trade in the last five years, Sun said it could
even reach as high as $50 billion if all barriers
to trade are removed. Sun said he would like India
to provide business visas more swiftly, besides
granting China market economy status. "At present,
about 37 countries have granted China the status
of market economy country, and I hope the Indian
government will take action early in this aspect
and recognize China as such." Sun also advocated
an investment protection agreement between the two
nations.
China edged past the United Arab
Emirates to become India's second-largest trading
partner in 2004, when bilateral trade shot up by
79% over the total trade volume of 2003. For
China, India has emerged among its top 10 Asian
trading partners for the first time. India was
China's ninth-largest trading partner in Asia in
2004. An FTA will add steam to this spurt in
bilateral trade. It's widely estimated that India
and China will emerge as the top economies of the
world by 2050. Predicted to have the largest gross
domestic products (GDPs) in another four decades,
they could dramatically change international trade
equations now dominated by the United States and
Europe.
The Chinese ambassador said health
care, industry and services are the fields where
the two countries can focus initially, apart from
agriculture. India and China have already reached
an agreement to "revitalize" and "diversify" their
cooperation in agricultural and allied sectors,
including dairy and fisheries, to strengthen
overall bilateral ties. Announcing this here on
Wednesday, officials said the agreement was
reached after Indian Agriculture Minister Sharad
Pawar met his Chinese counterpart, Du Qingling,
here on Tuesday, during which the two sides
discussed ways to promote bilateral cooperation in
the agricultural sector.
"The two
ministers assessed the existing state of bilateral
cooperation in the field of agriculture and agreed
to revitalize various aspects of cooperation in
this sector through mutually agreed mechanisms,"
an official said. They agreed that diversified and
broad-based cooperation between the two countries
in the field of agriculture and allied sectors,
including animal husbandry, dairy, fisheries and
trade in agricultural products, would make an
important contribution to the expansion of overall
India-China trade and economic linkages.
The two sides agreed that the agriculture
sector in India and China have many common
characteristics and both countries share the
common objective of ensuring rapid and sustainable
development of their respective agricultural and
rural economies. Officials from the two sides
stressed that the discussions were successful and
were held in a cordial, positive and friendly
atmosphere.
(Asia
Pulse/PTI) |
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