Free Trade Agreement
Free Trade Agreements (FTAs) are arrangements between two or more countries or trading blocs that primarily agree to reduce or eliminate customs tariff and non-tariff barriers on substantial trade between them. Free Trade Agreements (FTAs), normally cover trade in goods such as agricultural or industrial products or trade in services such as banking, construction, trading etc. Free Trade Agreements can also cover other areas such as Intellectual Property Rights (IPRs), investment, government procurement etc.
In Free Trade Agreements (FTAs), tariffs on items covering substantial bilateral trade are eliminated between the partner countries; however each maintains individual tariff structure for non-members.
Free Trade Agreements (FTAs), are generally more ambitious in coverage of tariff lines (products) on which duty is to be reduced. In an FTA there is a negative list on which duty is not reduced or eliminated.
The tariff concessions in an FTA are implemented at the ground level through customs notifications. In the case of phased implementation of concessions, the notifications are issued on a yearly basis.
Major Free Trade Agreements (FTAs) of India are as shown in the following table:
|S No.||Acronym||Groupings||Number||Member Countries Name|
|1||India ASEAN TIG||India ASEAN Trade in Goods Agreemnent||11||1. Brunei 2. Cambodia 3. Indonesia 4. Laos 5. Malaysia 6. Myanmar 7. Philippines 8. Singapore 9. Thailand 10. Vietnam 11 India|
|2||SAFTA||South Asia Free Trade Agreement||7||1. India 2. Pakistan 3. Nepal 4. Sri Lanka 5. Bangladesh 6. Bhutan 7. Maldives|
|3||ISLFTA||Indo Sri Lanka FTA||2||1. India 2. Sri Lanka|
|4||IMCECA||Indo Malaysia CECA||2||1. India 2. Malaysia|
|5||ISCECA||India Singapore CECA||2||1. India 2. Singapore|
|6||JICEPA||Japan India CEPA||2||1. India 2. Japan|
|7||IKCEPA||India Korea CEPA||2||1. India 2. South Korea|
Rules of Origin (RoO)
The Rules of Origin, therefore, become important in the context of making an assessment on the application of preferential tariff under an FTA. Hence, without the rules of origin, the preferential tariffs under an FTA cannot be implemented.
Rules of origin (ROO) are the criteria needed to determine the country of origin of a product for purposes of international trade. Their importance is derived from the fact that duties and restrictions in several cases depend upon the source of imports.