Free Trade Agreements
Introduction:
- In order to meet its aim of $2 trillion in exports by 2030, India is investing a lot of money in free trade agreements. (FTAs). India is negotiating free trade agreements with nations like Israel, the European Union, Canada, and the United Kingdom. The social and economic ramifications of an FTA are significant. It is reasonable to expect increased transparency both during and after the FTA negotiation process in light of this.
About FTA:
- A free trade agreement (FTA), which may involve two or more countries, is a contract to lessen import and export barriers.
- Government restrictions that prevent the flow of products and services across international borders, such as tariffs, quotas, subsidies, and bans, are reduced to almost nothing under an FTA.
- Protectionism in the economy or in commerce is the opposition of the idea of free trade.
FTAs with India:
- Preferred trade agreements (PTA), free trade agreements (FTA), comprehensive economic cooperation agreements (CECA), and comprehensive economic partnership agreements are some of the trade accords that give India and signatory nations or trade blocs preferential market access (CEPA).
The following is a list of the FTAs that India has ratified:
- Agreement on the South Asian Free Trade Area (FTA) between India and Sri Lanka (SAFTA: India, Pakistan, Nepal, Sri Lanka, Bangladesh, Bhutan, the Maldives and Afghanistan)
- India and Bhutan Trade, Commerce and Transit Agreement (Nepal-India Trade Treaty) Early Harvest Program under the Free Trade Agreement between India and Thailand (EHS)
- India and ASEAN Trade in Goods, Services, and Investment Agreement India and Singapore’s Comprehensive Economic Cooperation Agreement (CECA) (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam)
- Combined Economic Partnership between India and South Korea (CEPA)
- Japan-India CEPA
- Malaysia-India CECA
- Combined Economic Partnership between India and Mauritius (CECPA)
- Australia and India have signed the UAE-India Economic Cooperation and Trade Agreement (ECTA), but it has not yet taken effect.
The following six PTAs (preferential trade agreements) with narrower scope have also been ratified by India:
- the PTA between Chile and India under MERCOSUR, the GSTP (Global System of Trade Preferences), the SAARC Preferential Trading Agreement (SAPTA), the APTA (Asia-Pacific Trade Agreement), and (India-Afghanistan PTA) (According to data as of April 6, 2022 from the Union Ministry of Commerce and Industry)
FTA negotiations in progress with India:
These FTAs address a variety of subjects, including:
- Regulations affecting the trade in services, such as those governing data localization, digital issues, such as those involving intellectual property rights that may restrict drug accessibility, etc.
Objectivity when discussing commercial agreements:
- The majority of FTAs are, however, negotiated by India behind closed doors with little oversight and awareness of the goals and strategies employed by the general public. With the other nations India is negotiating an FTA with, this issue does not exist.
- For instance, a lot of influential organisations favour some transparency in the FTA talks taking place in the UK. Furthermore, institutional measures that enable the oversight of the executive’s actions before, during, and after the FTA’s signature are available. Investigate these systems immediately.
What the UK can teach India:
- In the UK, FTA talks are taking on.
- The Department of International Trade (DFIT) of the U.K. first releases a policy document outlining the strategic goals of FTA discussions and outlining the benefits of the U.K. having an FTA with a particular nation. No such publicly available document addresses the signing of an FTA or an appraisal of its effects on the environment and society in general in India. The Commerce Ministry, which acts as the focal point for FTAs, offers the most fundamental details on its website.
- Second, various stakeholders have provided comments and reactions to the DFIT’s policy paper, including corporations, non-governmental organisations, and others. The Indian Commerce Ministry also hosts interministerial gatherings and stakeholder engagements, albeit neither of these activities nor the responses to stakeholder concerns are made public.
- Third, the British Parliament carefully evaluates the strategic goals of the government before supporting an FTA. Indian law permits department-related committees to deliberate on important issues and provide suggestions. The Parliamentary Standing Committee on Commerce, however, hardly ever examines the factors that led the Indian government to decide to enter into and sign an FTA (PSCC).
- Fourth, the Constitutional Reform and Governance Act of 2010 in the UK stipulates that the government must explain a treaty to the British Parliament for 21 sitting days before ratifying it. As a result, the government can inform Parliament about the treaty it will ratify. There is no set system in place in India for the participation of the Parliament in the adoption of treaties, including FTAs.
Moving ahead:
India should draught legislation on signing treaties, including FTAs, taking a page from the U.K. The following elements should be included in this law:
- Before starting negotiations for a treaty like an FTA, the government should be transparent about the economic justifications and strategic goals behind them.
- The government should address the concerns of all parties after consulting with them, and the public should have access to this data.
- Similar to the IAC in the UK, the Indian Parliament should establish a committee to look into the strategic goals of signing an FTA.
- Before ratifying the FTA, the executive should give Parliament enough time to debate it on the floor for a predetermined period of time.
Conclusion:
- However, this authority needs to be used in a way that makes the executive responsible. The administration’s constitutional power to execute foreign treaties or general free trade agreements is without dispute. After all, holding the executive responsible for its actions is a crucial component of democracy. It shouldn’t be any different when negotiating global agreements like free trade agreements.
