Ceca lessons

By
From an editorial in The Financial Express

The report that India has been shortchanged by Singapore in the Comprehensive Economic Cooperation Agreement (Ceca) is a sobering pointer to three things. One, the pitfalls in bilateral vis-a-vis multilateral negotiations. Two, the importance of doing our homework properly. And three, our underdog status in the global economic pecking order.

Take these one by one. The cornerstone of multilateral trade negotiations is MFN (most-favoured nation) treatment, in terms of which countries treat all their trade partners equally. Bilateral agreements, in contrast, are a function of the relative economic power of the parties to the agreement. Consequently, as apparent from the double standards adopted by Singapore in its offers to India and the US, anything is par for the course. And while that is no reason why India should close the door on bilaterals—given the mushrooming of such deals globally—it is certainly reason to come to the table doubly prepared. Unfortunately, that is where we seem to have fallen short.

It is a different matter that Singapore might not have wanted to give us national treatment. Trade negotiations are all about each country trying to get the best deal for itself. And it is nobody’s case that if Singapore is willing to welcome US banks and insurance companies with open arms, it should do likewise with Indian financial intermediaries. The fact is, for all the talk of India and China being the new Asian super-powers, when it comes to the give and take of economic co-operation, we are still seen as a midget. It is for us to take a leaf out of China’s books and protect our interests better

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