Thursday, January 19 2006 11:10 Hrs (IST) - World Time -

Kolkata: India was having a joint study with Japan to look into the possibility of having a Free Trade Agreement (FTA) between the two countries, Union Commerce and Industry minister Kamal Nath said here yesterday (Jan 18,2006).

''We are having a joint study group with Japan to see how we can have a free trade agreement between us,'' Nath said at the 'Partnership Summit' of the Confederation of Indian Industry here.

The minister said the country was also having dialogues with some other regions for possible regional trade agreements (RTAs) to enhance India's access to the global market.

Speaking on the 'FTAs, RTAs : Limiting WTO goals,' he said, ''India has always stood for an open, equitable, predictable, non-discriminatory and rule based international trading system. It is our view that RTAs are building blocks towards the overall objective of trade liberalization. RTAs can actually suppot and facilitate the WTO's multilaterial trading system".

About India's growing global trade engagement, he said, ''The country now has a total trade engagement of about 350 billion dollars and is expected to achieve 500 billion dollars in the next three years.''

Japan's senior vice minister of economy, trade and industry Akira Matsu said Japan may have an economic partnership agreement (EPA) with India considering the true potential of the trade and investment flows between the two countries.

''Conclusion of a Japan-India EPA will lead not only to a reduction in tariffs, but also to improvements in investment regulations and the general business environments of both countries, wich would stimulated bilateral trade and investment ,'' she said, adding ''Japan looks forward to working closely with India in this regard''.

Earlier, Nath said that bilaterialsim and regionalism were held by many to be acting in the opposite direction of WTO goals, but ''The world economic engagement is not all black and white. There are huge grey areas in between. Often, Ftas within regions is an arrangement between more-or-less equals, and so it works with less discrimination. The international arena is fraught with inequalities''.

"The core issue for the future would be to recognize the existence of RTAs and impose discipline so that they are complementary to the WTO system," he said.

Stating that ''RTAs are here to stay,'' the minister said, ''We believe RTAs provide good opportunities to test the water of the domestic industry as world over the FTAs have acted as healthy precursors to free trade''.