World Trade Organization Organisation Mondiale du Commerce Organización Mundial del Comercio

Chinese Taipei 4:

WTO Secretariat Report (WT/TPR/S/249): (3) TRADE AGREEMENTS AND ARRANGEMENTS: (ii) Regional trade agreements: (Page 27, paragraph 20)

According to the Report, India has reservations regarding regionalism because of its complexity and possible trade diversion.

1. 
   Could India please elaborate further on its views on the adverse effects of regional trade agreements?
   

Reply: India's concerns on regionalism stem not from possible trade diversion but from the multiple tariff differentials, complicated rules of origin and the duty inversion effect of RTAs and how these could act as a disincentive for local manufacturing.

2. 
   In light of its apparent reservations and the statement that "signing regional trade agreements is an element of India's overall trade policy objective of enhanced market access for Indian exports", could India please explain to us exactly how it selects its partners for regional trade agreements? Also, what criteria are applied?
   

Reply: Selection of partners for an RTA depends on a number of factors like comparative advantage, domestic sensitivities, incremental benefits, complementarities in trade flows etc., and also the mutuality of interests seen by both partners.