WT/COMTD/RTA/8/2  
 
7 March  2017 
(17-1351) Page: 1/8 
Committee on Trade and Development  
Dedicated Session on Regiona l Trade Agreements  Original: English  
 
FREE TRADE AGREEMENT  BETWEEN THE ASSOCIATION OF S OUTHEAST ASIAN NATIO NS 
(ASEAN)  AND INDIA  
(GOODS)  
QUESTIONS AND REPLIE S 
 The following communication, dated  6 March 2017 , is being circulated at the request of the 
Parties to the Free Trade Agreement between  ASEAN and India . 
 
 The document reproduces the questions addressed to the Parties and the responses 
submitted.  
 
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Questions from the Delegation  of Canada  
 
Question 1  
 
In addition to incorporating key provisions from the WTO TBT Agreement, Canada has 
included WTO -plus TBT provisions in most of its recent free trade agreements in the 
areas of transparency and national treatment of conformity assessment bodies. 
Enhanced notifications and information exchanges can create transparency and 
openne ss in the regulatory process while according national treatment to conformity 
assessment bodies can decrease costs for exporters and facilitate trade between trading 
partners. In this context, Canada notes the non -tariff provisions in the ASEAN -India Free 
Tree Agreement and asks if WTO -plus provisions, such as enhanced transparency and 
national treatment for conformity assessment bodies, were considered during the 
negotiation? If yes, which ones? If no, why not?  
 
Response : While the ASEAN -India FTA is consi stent with WTO, it does not include the enhanced 
transparency and national treatment for conformity were not included under AIFTA.  
 
The idea behind concluding the India -ASEAN FTA was to have a greater understanding of the trade 
perspective between the Par ties with an objective to facilitate trade. Since the Parties are 
developing nations, it was a challenge to agree to WTO plus provisions in the trade environment 
prevailing at the time of the negotiations. In all earnestness, the FTA is WTO consistent and the 
Parties have been consistently striving to adhere to the transparency provisions of WT O even in 
the India -ASEAN FTA.  
 
As far as the conformity assessment bodies are concerned, the Parties have been careful in the 
implementation of the FTA so as not to be biased towards the national accreditation bodies, but at 
the same time having clear priorities of not supporting cross frontier accreditation except in cases 
defined in the international guidelines.  
 
 
 
 
 
 
 WT/COMTD/RTA/8/2  
 
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  Question 2  
 
Did India and ASEAN consider includ ing environment provisions in this Free Trade 
Agreement?  
 
Response:  ASEAN -India FTA does not have dedicated chapter or provision on Environment. If in 
the future, Parties wish to add a provision on environment, it will be done through agreement by 
all Part ies.  
 
 
Questions from the delegation of the United States  
 
Characteristic Elements of the Agreement  
 
Question 1  
 
Can the Parties please explain why the early harvest programme was discontinued? 
(Paragraph  2.1) 
 
Response:  The Early Harvest Programme was di scontinued as a result of deliberations between the 
parties and hence the information may be privy to the parties of the deliberations.  
 
Question 2  
 
We would like to note that the link to the agreement that ASEAN provided do es not w ork 
(Paragraph 2.2). Can the Parties please provide a functioning link?  
 
Response:  Information on ASEAN -India Free Trade Agreements is available on the ASEAN website 
as well as on the website of Ministry of Commerce of India as follows:  
http://asean.org/?static_post=asean -india-free-trade -area-3 
http://commerce.gov.in/PageContent.aspx?Id=45  
 
Provisions on Trade in Goods  
 
Question 3  
 
Can the Part ies provide data on how much of the current trade between the Parties is 
covered by the preferential treatment extended under the Agreement?  
 
Response:  Based on India’s preferential import data analysis, the rate of utilisation of the India -
ASEAN FTA, whic h is the ratio of preferential imports to total -imports, was 24.4%  in 2015 -16. In 
the meantime, based on ASEAN Secretariat’s data, each ASEAN+1 FTAs  in average is used by 26% 
of ASEAN exporters – not specific data on AIFTA . 
 
Question 4  
 
Have all the Partie s applied all their tariff commitments consistent with the Agreement’s 
tariff schedules since implementation of the Agreement?  
 
Response:  Parties have applied the tariff commitments in accordance with the Agreement.  
 
Question 5  
 
Article 4 of the Agreement allows for Parties to unilaterally accelerate their tariff 
liberalizat ion and reduction commitments. Have any Parties undertaken unilateral 
liberalization? If so, which Parties, and how many tariff lines have they accelerated?  
 
Response : For India, unilate ral liberalization does happen on the basis of assessment of domestic 
concerns/interest. It happens on MFN basis, while for AMS, so far no AMS have unilaterally 
accelerated tariff liberalization.  
 
 WT/COMTD/RTA/8/2  
 
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  Question 6  
 
Have any Parties unilaterally reduced their ov erall applied MFN tariff rates so that they  
are lower than the tariff rates in their AIFTA schedules? If so, which Parties and how 
many tariff lines?  
 
Response:  For India, it does happen in some cases, while for ASEAN, no AMS have unilaterally 
accelerated tariff liberalization.  
 
Question 7  
 
Paragraph 3.3. What percentage of tariffs fall in Normal Tracks 1 and 2, Sensitive Track, 
and Specia l Products lists respectively?  
 
Response : India’s offer to ASEAN under India -ASEAN Trade in Goods Agreement is: NT1 70.1 8%; 
NT2-9.17%; ST -11.20%; HST -0.10% and EL -9.36% as per available records.  
 
For ASEAN, see table below  
 
 
Party  Tariff Category (%)   
NT-1 NT-2 ST HST EL Special  
Products  
BN 68.5 11.2 7.4 0 12.9  
KH 80 4 14 0.2 2  
ID 41.9 4.7 39.9 6.3 7.2  
LA 68.8 8.7 19.8 0 2.8  
MY 63.7 13.1 13.3 1.1 8.8  
MM 62.1 6.9 14.7 0 16.3  
PH 58.9 16.7 6.8 4.4 13.2  
SG       
TH 66.7 8.9 11.5 0.3 12.6  
VN 59.5 8.6 7 5.8 19.1  
  Note: Based on available data under HS 2007  
 
Question 8  
 
Section 3.1.2 of the Secretariat repor t describes the tariff cuts under the agreement. The 
parties to the agreement started in different places, that is, the number of MFN  free 
tariff lines prior to the agreement varied significantly among the parties. According to 
the Secretariat report, the percentage of MFN free lines prior to 2010 ranged from zero 
(Lao PDR ) to 99.9 percent (Singapore). After the implementation of the tariff 
elimination and reductions, a significant number of lines will still be subject to duties. If 
one were to omit Singapo re, which had only six dutiable lines at the time of entry into 
force, the figure ranges from 14.8 percent of lines (Cambodia) , to 49.6 percent 
(Indonesia). The average for the parties i s about 24.6 percent of lines.  
 
Can the Parties explain why so many ta riff lines were left untouched?   
 
Response:  The number of tariff lines agreed for reduction/elimination of duty is an outcome of 
negotiation.  
 
Question 9  
 
In addition, the average final tariffs remain quite high for some sectors, particularly for 
Sections I through IV  of the Harmonized System.  Chart 3.1 indicates that for some 
parties to the agreement, there was very little or no reduction in duties for goods in 
Chapters 1 through 24.  WT/COMTD/RTA/8/2  
 
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  Response:  The tariff reduction in the Agreement is outcome of negation be tween the parties and 
during the course of negotiations each party try to have balance between safeguard of the 
domestic industry/farmer and tariff concessions being offered. In addition, these goods under the 
abovementioned sections (Chapter 1 –24) are con sidered domestically sensitive for most Parties of 
the Agreement.  
 
Question 10  
 
Paragraph 3.38 of the report describes the cuts made by India: “Moreover, while 
average preferential tariffs are lower in many industrial Chapters than the 
corresponding MFN a verage, this is not the case for most agricultural chapters 
suggesting fewer preferential tariff concessions in agricultur e than in industrial 
products. The highest average preferential tariffs (equivalent to the MFN average) are 
found in HS 22 (preferenti al and MFN average of 149 percent), 17 (60 percent), 10 (57.5 
percent) and 6 (50 percent).”  Paragraph 11 on page 44 of the report notes that India’s 
average MFN tariff for agricultu ral products was 33.3 percent. After implementation, the 
average tariff fell only to about 31 percent.  
 
Why did a number of the parties make relatively small duty reductions for agricultural 
products?  
 
Response:  In the India -ASEAN FTA, India has maintained a number of items under Exclusion List, 
such as vegetables, fruits/nuts, spices, cereals/grains, Oilseeds/Oils, fish/fisheries, textiles, auto, 
chemicals, rubber, tobacco, milk butter, sugar etc, where no tariff concessions have been granted.  
It has been done keeping in view domestic sensitivities & interest in agriculture sect ors 
 
Question 11  
 
The tariff lines that remain subject to duties are not insi gnificant. Tables A1.4 and A1.5 
list the top 25 exports of each of the parties.  After tariff reductions, many of these major 
exports remain subject to duties. In several cases, ta riff cuts will affect less than half of 
the number of lines that cover the  major exports.  
 
If it is correct, how are the parties benefitting from this agreement on the tariff side 
given the agreement’s significant tariff exclusions?  
 
Response : Tariff exclu sion was mainly found under Chap ter 1 -24 (agricultural goods) while 
Chapter 25 -97 (industrial goods) give better preferential  access. Despite the tariff exclusions, total 
trade between ASEAN and India has increased substantially, from  US$ 39.1 billion  in 2009 to US $ 
58.6 billion in 2015 (based on ASEAN statistics), whereas according to India’s statistics, India’s 
trade with ASEAN has increased from US$45.34 billion in 2008 -09 to US$ 65.06 billion in 2015 -16. 
 
Furthermore, ASEAN trade with India has increase d subs tantially from US$ 12.1 billion  in 2002 to 
US$ 58.6 billion in 2015  
 
Question 12  
 
The Secretariat report includes graphs that display trade between the parties. Chart 1.1 
seems to indicate that at least two ASEAN countries (Philippines and Singapore ) actually 
export less to India than they did before the agreement entered into force. Chart 1.2 
indicates that India’s trade with ASEAN is generally the same as it was at the time of 
entry into force.  
 
Are the Parties contemplating additional tariff elim ination to spur increased trade ? 
 
Response:  Additional tariff elimination under the India -ASEAN Trade in Goods Agreement is not on 
the Agenda as of now. Moreover, sometimes increase in trade cannot be the single yardstick to 
measure the performance of a FT A. There may be several factors impacting the trade.  
 
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  Question 13  
 
The report notes that the agreement includes provisions that allow for future 
negotiation of pro duct-specific rules of origin. The report also notes that no such 
negotiations have taken pl ace since the agreement entered into force.  
 
Have the Parties conducted any analysis that would support changes to the rules of 
origin which might help stimulate trade between the parties?  
 
Response : In future dates Parties may conduct the analysis as part  of the review of the Agreement 
to help stimulate trade between the Parties.  
 
Question 14  
 
Since implementation of the Agreement, have the Parties modified or augmented their 
commitments, for example by adding specific commitments r elated to non -tariff 
barriers? Are there any plans to do so in the future?  
 
Response:  The ASEAN -India Trade in Goods Agreement came into effect in 2010. Since its 
implementations in 2010, Parties have come a long way in enha ncing and promoting the trade. 
However, as of now, no Pa rties have added specific commitments related to non -tariff barriers  
 
Given the dynamic trade environment, it is a challenging task to agree to adding specific 
commitments related to non -tariff barriers by 11 nations that have been developing at different  
paces. In today’s context it is more important to have discipline on non -tariff issues and hence it 
would be more appropriate to address them as non -tariff measures than as non -tariff barriers. As 
the world is moving towards reduction  of tariffs to promot e trade,  it may be more pertinent in 
future to consider having special commitments relating to  non-tariff ‘measures’. The changing 
trade and regulatory environment wou ld be a few governing factors.  
 
Question 15  
 
Have any Parties applied the bilateral safe guard mechanism in Article 10?  If so, which 
Parties and for which products?  
 
Response : None of the parties to the Agreement has used the bilateral safeguard mechanism so 
far. 
 
Question 16  
 
The Enabling Clause states that such agreements “shall be designed  to facilitate and 
promote the t rade of developing countries.” In light of the issues identified by the 
United States in these questions, how is the Agreement doing this?  
 
Response : Since India -ASEAN FTA is between Developing Countries, the same meets the 
requirement of the Enabling Clause. Facilitating and promoting the trade between the Parties is 
performed through liberalization of tariff and non -tariff measures.  
 
General Provisions of the Agreement  
 
Question 17  
 
Paragraph 4.6 provides information on t he proce ss for amending the agreement.  
 
Have there been any proposals for amendments? If so, what have the to pics of those 
amendments been?  
 
Has the Jo int Committee met?  If so, how often? What have been the topics of 
discussion? (Paragraphs 4.7 and 4.8)  
 
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  Response:  Parties  to ASEAN -India Trade in Goods Agreement have agreed for review of the 
Agreement and the Scope of Review of the AITIG Agreement includes:  
(i) implementation issues;  
(ii) facilitation measures;  
(iii) to take into account other negotiatio ns on further liberalisation of trade in goods;  
(iv) sharing and exchanging of trade data and;  
(v) promoting AITIG Agreement to the stakeholders.   
 
However, considering that ASEAN Member States (AMS) are intensifying efforts to conclude RCEP 
negotiation s, as well as the need to take into account the  outcomes of RCEP, AMS has agreed to 
defer the review of th e Agreement.  
 
The Joint Committee, in terms of Article 17 of the Agreement, has not yet been  constituted.  
 
Question 18  
 
Please clarify which provision s of the ASEAN -India FTA are subject to the dispute 
settlement mechanism. We understand that the tariff reductions and bilateral 
safeguards are covered by dispute settlement. What about SPS, TBT, agricultural 
safeguards, safeguards for balance of payments,  subsidies and state -aid, and customs 
procedures?  
 
Response:  Article 2 (Coverage & Application) of the Agreement on Dispute Settlement Mechanism 
(DSM) and Article 18 (Dispute Settlement Mechanism) of Agreement on Trade in Goods under 
India-ASEAN CECA speci fy that “unless otherwise provided in this agreement, any dispute 
concerning the interpretation, implementation on application of  this agreement shall be resolved 
through the procedures & mechanism as set out in the ASEAN -India DSM agreement”.  
 
Bilateral Safeguard (Article 10) & Customs Procedures (Article 14), Non -Tariff Measures, including 
SPS & TBT under Para 2 of Article 8 and Measures to Safeguard the Balance of Payments (Article 
11), are covered under DSM.  However, the scope & coverage and the forum  will be as for Paras 5 
& 6 of Article 2 of DSM under the India ASEAN CECA.  
 
There is no chapter on subsidies and state aid under AIFTA Agreement on Trade in Goods.  
 
Question 19  
 
Paragraph 4.9 provides information about which dispute settlement mechanism ( DSM) 
will prevail if there are conflicts between the DSM and any special and additional rules 
and procedures for dispute s ettlement in other agreements. What are the conflicts that 
exist between the DSM and these other agreements?  
 
Response : No conflicts h ave existed between the DSM and the other agreements. This is     a catch 
all clause and would be useful in case of conflict in procedure between the two Parties, when the 
trading partners have the bilateral FTA as well as the plurilateral FTA      like In dia-ASEAN CECA.  
 
Question 20  
 
Have any of the parties invoked the dispute settlement procedures? How many 
consultations have been requested? How many panels have been established? 
(Paragraphs 4.9 -4.17)  
 
Response : None of the parties to this Agreement has i nvoked the dispute settlement procedure 
under the agreement so far.  
 
Question 21  
 
What is the role of the Liaison Office and why have the offices not been set up? 
(Paragraph 4.11 ) 
 
Response:  Article 3 of DSM under ASEAN -India CECA provides for Liaison Offi ce. Role of the 
Liaison O ffice has been stated therein. For India, the Liaison office for the stated purpose is the WT/COMTD/RTA/8/2  
 
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  Department of Commerce in the Ministry of Commerce & Industry, Udyog Bhavan, New Delhi. For 
ASEAN, no Liaisons Office has been set up.  
 
Ques tion 22  
 
Paragraph 4.18 describes the relationship between this agr eement and other 
agreements. We are aware that ASEAN, India and ASEAN’s other +1 FTA partners are in 
the process of negotiating the Regional Comprehensive Econom ic Partnership (RCEP).  
What  is the plan for how the existing ASEAN+1 agreement s, such as the ASEAN -India 
FTA, will be treated once the R CEP negotiations are concluded?  Will the existing 
agreements continue to exist or will they be replaced by RCEP?  
 
Response:  ASEAN +1 FTAs are consi dered as building block toward wider scope of ASEAN FTA 
under RCEP. The ASEAN -India FTA would co -exist with the Regional Comprehensive Economic 
Partnership (RCEP) Agreement, once the latter is operationalized.  The proposed RCEP Agreement 
would build upon the existing  ASEAN -India FTA.  
 
Question 23  
 
Why did the parties not notify the Agree ment under GATT Article XXIV?  
 
Response: Vide WT/COMTD/N/35 dated 23 August 2010 and WT/COMTD/N/35/Add. 1 dated 31 
May 2012, India -ASEAN Trade in Goods Agreement was notif ied to the WTO, under Paragraph 4 
(a) of the Enabling Clause, as per the differential and more favourable treatment accorded to 
developing countries under the Decision  of 28 November 1970 (L/4903). The Framework 
Agreement of India -ASEAN FTA was also notifi ed vide WT/COMTD/N/35 dated 23 August 2010 and 
WT/COMTD/N/35/Add. 1 dated 31  May 2012.  
 
Question 24  
 
Were parties to the agreement concerned that their agreement, which lacks significantly 
in tariff reduction and elimination, would not satisfy the “substan tially all trade” test?  
 
Response : ASEAN -India FTA is classified as an FTA concluded between developing countries. 
Hence, it could apply GATT decision promulgated on 28 November 1979, which is called the 
“Enabling Clause”.  
 
The “Enabling Clause” provides an exemption from the MFN requirement in GATT Article 1 with 
respect to “regional or global arrangements entered into amongst less -developed contracting 
parties for the mutual reduction or elimination of tariffs.” The “Enabling Clause” states that 
developi ng countries are not required to liberalize “substantially all of their trade” as long as FTAs 
betwee n developing countries offer mutual reduction or elimination of tariffs. Furthermore, 
“Substantially all trade” has not been defined in the WTO text nor cl arified under WTO 
jurispruden ce so far. Moreover, FTAs are signed between the Parties based on the negotiations 
keeping in mind various factors, including sensitivities thereof.  
 
Question 25  
 
In the view of the parties, how does this agreement contribute p ositively to the 
multilateral trading system?  
 
Response:  FTAs provide WTO plus provisions. These provisions may vary in their scope & coverage 
in different FTAs. Furthermore, all A SEAN +1 FTAs, including AIFTA, are aimed at building blocks 
toward the multi lateral trading system.  
 
Question 26  
 
When do the parties to this agreement that continue to maintain non -notified RTAs plan 
to notify them to the WTO, as required under the Transparency Mechanism?  
 
Response : India will notify them as explained in the resp onses for the Questions below.  
 WT/COMTD/RTA/8/2  
 
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  Question 27  
 
Specifically, can the Parties explain why the ASEAN Framework Agreement on Services 
has not been notified ? 
 
Response:  This is a question on AFAS, which is not relevant with AIFTA  
 
Question 28  
 
Can Thailand expla in why it has not notified the Chile -Thailand FTA, or the Peru -Thailand 
early harvest?  
 
Response:  The question is not relevant with AIFTA.  
 
Question 29  
 
Can the Parties explain why they have not notified the Thailand - India early harvest 
Agreement?  
 
Response : The notification process is ongoing.  
 
Question 30  
 
Can Malaysia explain why it has not notified the Malaysia – Turkey Agreement?  
 
Response:  The Malaysia - Turkey Agreement has been notified to the CRTA under Article XXIV  
 
Question 31  
 
Can Indonesia e xplain why it has not notified the Indonesia - Pakistan Agreement?  
 
Response:  Indonesia and Pakistan are still discussing on the notification process of this 
Agreement, and will notify it to the WTO once it has accomplished.  
 
Question 32  
 
Can India explain why it has not notified the SAARC Agreement on Trade in Services?  
 
Response:  The notification of the SAARC Agreement on Trade in Services (SATIS) will be proposed 
by all Member  States and notified to the WTO.  
 
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