WT/REG300/M/1  
 
4 October 2013  
(13-5362) Page: 1/3  
Committee on Regional Trade Agreements 
Seventieth Session    
 
 CONSIDERATION OF THE FREE TRADE AGREEMENT BETWEEN  
INDIA AND JAPAN, GOODS AND SERVICES 
NOTE ON THE MEETING OF 17-18 SEPTEMBER 2013 
Chairman: Ambassador Francisco Lima Mena (El Salvador) 
1.1.  The 70th Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WTO/AIR/4163/REV.1 dated 4 September 2013. 
1.2.  Under Agenda Item B.VIII of this session,  the CRTA considered the Free Trade Agreement 
(FTA) between India and Japan (hereinafter "the Agreement"). 
1.3.  The Chairman said that the Agreement had entered into force on 1 August 2011. It had been 
notified to the WTO by the Parties on 14 September 2011 under Article XXIV:7(a) of the 
GATT 1994 and the Understanding on the Interpretation of Article XXIV of GATT 1994 as an 
Agreement establishing a free trade area (document WT/REG300/N/1) and under 
GATS Article V:7(a) as an Agreement providing for th e liberalization of trade in services within the 
meaning of Article V of the GATS (document S/C/ N/601). The text of the Agreement was available, 
together with its Annexes, on the Parties' official websites. The Factual Presentation on the goods 
and services aspects (document WT/REG300/1 da ted 9 July 2013) had been prepared by the 
Secretariat on its own responsibility in full consultation with the Parties, in accordance with paragraph 7(b) of the Transparency Mechanism for Regional Trade Agreements (document 
WT/L/671) ("TM"). Written questions and replies on this Agreement had been distributed in 
document WT/REG300/2 dated 10 September 2013. He proposed to organize the consideration of the Agreement by first asking the Parties and then other Members to give any general comments 
and then use the Factual Presentation, docu ment WT/REG300/1, to guide the discussion. 
1.4.  The representative of Japan thanked th e Committee for the opportunity to present the 
important elements of the Comprehensive Econom ic Partnership Agreement (EPA) between Japan 
and the Republic of India (IJCEPA) for review and examination by WTO Members. Japan's basic 
external economic policy was to maintain and strengthen the multilateral trading system grounded in the principles of the WTO. Japan had been pr omoting bilateral EPA/FTAs that would complement 
and further promote trade liberalization based on the WTO. As part of such a policy, Japan had 
concluded this EPA with India, which encompassed areas beyond the liberalization of trade in 
goods and services, including movement of natural persons, liberalization of investment, protection of intellectual property, rule-mak ing in government procurement and competition 
policy, improvement of the busi ness environment and promotion of cooperation. By promoting 
economic partnership in these areas, Japan aimed to further strengthen comprehensive economic ties with India. 
1.5.  India was the third largest economy in Asia and the largest EPA partner of Japan. It was 
expected by concluding this Agreement to liberaliz e and facilitate trade in goods and services and 
to promote investment and rule-making in seve ral areas, and as a consequence, to enhance 
business opportunities strengthening economic partnership between the two countries. It was also 
expected that the conclusion of the IJCEPA woul d contribute to further develop and enhance the 
comprehensive economic partnership within the region as a whole. In December 2006, the Prime Ministers of Japan and India had decided to start negotiations. The first round of negotiations was 
held in January 2007. After the 14
th round of negotiations, both sides had reached an agreement WT/REG300/M/1 
 
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  in substance in September 2010, and the leaders of both countries had confirmed that the 
negotiations had successfully been completed in October of the same year, to be followed by the finalization of the legal texts of the Agreement. The IJCEPA was signed by the Minister for Foreign 
Affairs of Japan and the Minister for Commerce and Industry of India on 16 February 2011 in 
Tokyo, and had entered into force on 1 August 2011. 
1.6.  IJCEPA was a comprehensive economic partnership agreement. In terms of trade in goods, it 
would eliminate about 94% of tariffs within ten years in terms of two-way trade volume in 2006. 
In addition, it covered all major sectors. Furthermore, the two countries had no other restrictive 
regulations of commerce that would be inconsistent with GATT, and the Agreement did not establish any restrictions on commerce nor maintain any existing ones. Moreover, concerning trade in services, IJCEPA provided national treatment for a broad range of sectors and sub-sectors. 
Therefore, the Agreement was consistent with Ar ticle XXIV of GATT and Article V of GATS. With 
regard to the economic effects of the IJCEPA, it was difficult to measure the genuine effects of the Agreement proper as the actual volume of trad e and investment between the two countries could 
be affected by various factors, such as economic fluctuations. In any case, it was expected that 
the IJCEPA would be a solid foundation for the increase of trade and investment between the two countries by strengthening the economic partnership through various means provided in the 
Agreement.  
1.7.  The Agreement included provisions on a broad range of legal issues, such as a higher level of 
protection of intellectual property, a high level of liberalization in investment and trade in services, movement of natural persons, improvement of  the business environment and cooperation in 
twelve different fields. Under the Agreement, besides the Joint Committee, Sub-Committees had 
been established in areas such as Rules of Origin, Customs Procedures, TBT/SPS, Trade in Services and Improvement of the Business Environment, fo r the purpose of effective implementation and 
operation. The Joint Committee had met at the time  of the entry into force of the Agreement, and 
the Operational Rules for its effective implementa tion had been adopted thereunder. With regard 
to the Sub-Committees, so far, the one on TBT/SPS had met twice and once for the other sectors. 
At the second Joint Committee meeting, the establishment of the Sub-Committee on Movement of 
Natural Persons had been decided. In conclusion, he thanked the Committee once again for giving 
the Parties this opportunity to submit this report on the IJCEPA. The Parties were fully convinced that the Agreement had provided a foundation for further growth in bilateral trade and investment 
as well as strengthening the economic ties between Japan and India. He hoped that the 
implementation of the Agreement would contribute  to strengthen the WTO multilateral trading 
system. 
1.8.  The representative of India thanked the Secr etariat for preparing the Factual Presentation on 
the India-Japan FTA so that Members could get an overview of the Agreement. He also thanked 
the delegations of Australia, Canada, the European Union and the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu for showing interest in the Agreement by asking written 
questions in advance. He also thanked the dele gation of Japan for its co-operation in the 
preparatory work. India and Japan had a glob al and strategic partnership. There was a 
commitment at the highest level for wider and deeper regional integration and the Comprehensive 
Economic Partnership Agreement was one of the important steps to strengthen the economic 
partnership. Further, both countries duly recognized  the importance of RTAs as stepping stones for 
moving towards global free trade in  goods, services and people so as to strengthen the multilateral 
trading system. The Agreement, implemented since 1 August, 2011, was one of the most 
comprehensive agreements signed by India so far and covered not only trade in goods but also 
services, movement of natural persons, invest ments, intellectual property rights, customs 
procedures and other trade related issues. It also assumed significance because it was the first 
agreement signed by India with a developed count ry. The CEPA envisaged abolition of tariffs on 
over 94% of items traded between India and Japan over a period of ten years. 
1.9.  Almost two years into the Agreement, Indi a and Japan had recognized the vast potential of 
the Agreement. It had given a major impetus to  economic and trade relations between the two 
countries and there was confidence amongst both partners that the Agreement would further strengthen bilateral trade. Bilateral trade, as pe r the data maintained by the Director General of 
Commercial Intelligence and Statistics of India, had seen an upward trend in the last five years. It 
had grown from US$10.9 billion in 2008-09 to US$18.5 billion in 2012-13, an increase of around 70%. If seen on a year-on-year basis, total bilate ral trade had grown by more than 30 % in both 
2010-11 and 2011-12 and by 1% in 2012-13. India's exports to Japan had grown from US$3 WT/REG300/M/1 
 
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  billion in 2008-09 to US$6.1 billion in 2012-13 (an increase of around 100%) and imports from 
Japan had increased from US$7.8 billion in 2008-09 to US$12.4 billion in 2012-13, an increase of 
around 60%. The Agreement was thus helping both countries to increase their bilateral trade. 
1.10.  Japan had put 80% of its tariff lines and 92% of its imports from India under immediate 
tariff liberalization (zero duty when CEPA came into force). A large number of these items were of 
export interest to India e.g. marine products, agricultural products, petroleum and textile products etc. In the case of pharmaceuticals, under CEPA Japan had agreed to accord no less favourable 
treatment to applications from Indian companies than that it accorded to like applications from its 
own persons. This was expected to greatly help Indian pharmaceutical companies. The social security agreement between two countries had also been signed as a result of CEPA.  
1.11.  In the area of services, both countries had taken GATS plus commitments.  India had made 
commitments for liberalization in telecoms, financial and distribution sectors. Japan had taken 
additional commitments in cross border supply an d movement of natural persons. Moreover, the 
two countries had set a bilateral trade target of US$25 billion to be achieved by 2014. India hoped 
that with a growth rate of nearly 30% over the la st two years, the bilateral trade target would be 
achieved within the stipulated deadline. Overa ll, the India-Japan CEPA held the promise of 
enhanced mutual benefits for both countries in the years to come. India looked forward to greater 
trade and, through it, a stronger economic and strategic partnership with Japan. 
1.12.  The representative of the United States th anked the Parties and the Secretariat for the work 
that made the review of the Agreement possible.  Although his delegation had no questions, he 
wanted to draw attention to the significant number of exclusions as well as the low level of tariff 
elimination by both Parties in the agricultural sector. While India eliminated tariffs on only 67.3% 
of agricultural products, Japan, a developed country , eliminated tariffs on even fewer agricultural 
products, only 59.6%. With respect to Table 5.1, Participation in Other RTAs, the United States 
looked forward to the notification of the RTA between India and Thailand. 
1.13.  The representative of the European Union thanked the Parties for their comprehensive 
presentation of the Agreement. In particular th e EU had noted the improvement in the level of 
commitments of the Parties on services compared with their GATS commitments.  Her delegation 
appreciated also the exhaustive description of this part of the Agreement contained in the Factual Presentation. Should the EU have additional fo llow-up questions, these would be provided in 
writing. 
1.14.  The representative of Australia thanked the Parties for the responses to its questions which 
his delegation was reviewing with interest.  He reserved the right to come back with any further 
questions in writing. 
1.15.  The Chairman said that the consideration of the Goods and Services Aspects of the Free 
Trade Agreement between India and Japan had allowed the Committee to clarify a number of 
questions and the oral discussion of this RTA could be concluded in accordance with paragraph 11 
of the Transparency Mechanism. If any delegations wished to ask follow up questions they were 
invited to forward submissions in writing to the Secretariat by 24 September 2013 and Parties 
were asked to submit replies in writing by no later than 8 October 2013. In accordance with paragraph 13 of the Transparency Mechanism all wr itten submissions, as well as minutes of this 
meeting would be circulated promptly, in all WTO official languages, and would be made available 
on the WTO website.  
1.16.  The Committee took note of the comments made. 
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