WORLD TRADE  
ORGANIZATION  WT/REG228/3 
20 October 2008 
 
 (08-5031) 
Committee on Regional Trade Agreements Original:   English 
  
 
COMPREHENSIVE ECONOMIC COOPERATION AGREEMENT BETWEEN 
INDIA AND SINGAPORE  
 
Questions and Replies
 
 
 
 The following communication, dated 14 October 2008, is being circulated at the request of the delegation of India.   This document reproduces the follow-up
 questions addressed to the Parties following the 
50th Session of the CRTA and the responses submitted.  
 
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Follow-up Questions from the Delegation of the European Communities  
 
General comments  
 1. We would like to underline the EC concerns on  the compliance of this Agreement with 
Article XXIV requirement to eliminate tariffs on  substantially all trade.  According to the 
factual presentation, only 23.6% of Indian tari ff lines are liberalised und er the Agreement.  This 
is a significantly very low and unambitious c overage, which cannot be understood as to cover 
substantially all the trade.  We have specific questions in this regard, and concerning other 
areas of the agreement, which we would like to address as specific comments.  
 At the 50th CRTA meeting, Singapore stated that the CECA is both WTO-consistent and 
WTO-plus.  It significantly builds on the parties’ existing commitments in the WTO.  Moreover, the 
CECA is a dynamic agreement.  The review me chanism, as illustrated in the first review of 
October 2007, provides the platform for the partie s to continually liberalize and integrate their 
markets.  In fact, since the conclusion of the CECA , bilateral trade has increased by more than 30% 
per annum and the Parties are confident that this would increase further.   
 India also stated at that meeting that the CECA meets the requirements of GATT XXIV, 
including "substantially all trade".  While India has supported efforts to bring precision to the term, it 
is a well known fact that it has been difficult to fi nd consensus on the definition.  Australia in its 
communication to CRTA (WT/REG/W/22/Add.1, April 1998) proposed a figure of 95% to define 'substantially all the trade'.  That was a commendabl e effort to bring precisi on.  However, Australia 
itself said in the meeting that the figure was 'arbitr ary' and was offered 'for discussion purposes'.  In 
the CRTA meeting of February 1998, there was a detailed but inconclusive discussion on the issue. 
Ensuing discussions in CRTA and even  the DSM, as in the Turkey tex tiles case, have so far not led us 
to an acceptable definition. In th e Turkey Textile Case the Appellate Body said that "Neither the 
GATT Contracting Parties nor the WTO Members have ever reached an agreement on the interpretation of the term 'substantially' in this provis ion.  It is clear though, that 'substantially all the WT/REG228/3 
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  trade' is not the same as all the trade, and also that 'substantially  all trade' is something considerably 
more than " some  of the trade". 
 
Trade in Goods
 
 
Follow up to question 4, 5 and 10, regar ding the coverage of the Agreement  
 
2. The EC notes that for India, a total of 23. 6% of tariff lines are to be liberalized under 
the Agreement, which correspond to 75.1% in t erms of import values from Singapore for the 
period 2003-5. In response to the EC concerns re garding the compliance with the obligation to 
eliminate duties on substantially all trade, as set out in Article XXIV, the Parties argued that the 
agreement provides for expansion of c overage under the review mechanism.  
 The EC would kindly ask the Parties to clar ify and explain in detail the ultimate 
objective of this FTA, what the Parties aim at in terms of liberalization commitments and to present to Members a clear plan and schedule for achieving those commitments, which would 
then help Members to actually consider this  Agreement. Failure to do so would prevent 
Members from effectively considering this Agr eement since we would not be able to assess 
commitments which are, as the Parties state, still to be negotiated.    In addition, the EC would also like to recall th e Parties to notify subsequent changes in a 
timely fashion, as set out in paragraph 14 of the Transparency mechanism.  
 
 Finally, the EC would like the Parties to ex plain in detail the current coverage of the 
Agreement, in terms of trade and tariff  lines, after the conclusion of the 1
st review of the CECA 
in October 2007.  
 The ultimate objective of this FTA may be in ferred from the preamble of the CECA – “… 
DESIRING  to promote mutually beneficial economic  relations; AIMING to enhance economic and 
social benefits, improve living standards and ensure hi gh and steady growth in real incomes in their 
respective territories through the expansion of trade  and investment flows; … DESIRING to promote 
greater regional economic integration and believing that their cooperative fr amework could serve as 
a template for future integration with oth er countries in the South East Asian region;  …” 
 
 Under the CECA, after the conclusion of the 1st review of the CECA in October 2007, tariff 
elimination is being achieved for 80.73% of th e trade, according to India’s import data. 
 
Follow up to question 7, 8 and 9, regarding export duties  
 
3. In particular, we would like to highlight that Parties have actually not replied to 
question 9, and therefore, I would formulate again the question:  Could the Parties elaborate – with respect to current and any future export duti es on trade between the Parties – on how they 
intend to ensure compliance with the obligation set out in GATT Article XXIV to eliminate duties and restrictive regulations of commerce on substantially all the trade between the 
Parties?  
 In this regard, the EC would like to underline the obligation, as set out in Article XXIV, 
to cover export duties in their liberalization commitments.  
 The export duties are consistent with WT O obligations, including GATT Article XXIV. 
 
 
  WT/REG228/3 
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  Trade in Services  
 Follow up to question 38, regarding banking services.
 
 
4. Could India clarify if the so-called "global quota" on new foreign bank branches in 
India as referred to by India in its response to question 38 constitutes the quota on new foreign 
bank branches which has been bound by India under the GATS? If it does, could India please clarify how this is compatible with India's obligations under GATS Article XVII? 
 India stated at the CRTA meeting that it h as committed to 12 branches per year under GATS. 
In the CECA, India has committed to provide 15 br anches to three Singapore banks over a period of 
four years.  Even before the signing of the CECA, India had been exceeding the bank licences 
commitment every year and, therefore, India views the issue of violating its commitments does not arise.    
Follow-up Questions from the United States
 
5. As follow-up to question 30 in WT/REG228/2, we  request that India please provide a list 
of which 404 tariff lines are to be eliminated and which 135 tariff lines a re to be reduced. What 
is the timetable for elimination of the 404 lines?  
 The list of products under the additional tari ff concessions is at the following web link: 
  http://commerce.nic.in/trad e/ceca/Tariff_List_Signing_Protocol_CECA_Final.pdf
 
 
 The timeframe is 1 December 2011 and 1 December 2015 for tariff elimination. 
 
6. The responses of India and Singapore to question 38 in WT/REG228/2 appear to 
contradict one another.  Can the parties conf irm whether the branch licenses that India has 
committed to provide to the designated Sin gapore banks will be over and above the quota 
inscribed in India's GATS schedule or whether they will – in  effect – reduce that quota to non-CECA parties?  India’s response, which we presume is authoritative, suggests that the 
licenses granted to Singapore will indeed be subtracted from its global quota.  
 If these branch licenses will in fact come out of India's global quota on new foreign bank 
branches, how does this commitment in the CECA co mply with the obligation in Article V:4 of 
the GATS not to raise the overall level of ba rriers to trade within this sector for other 
Members? 
 
 Please see response to question 4.  
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