How is CEPA/CECA different from FTA? A Comprehensive Economic Partnership Agreement (CEPA) or Comprehensive Economic Cooperation Agreement (CECA) is different from a traditional Free Trade Agreement (FTA) in two ways.

Firstly, CEPA or CECA are more comprehensive and ambitious than an FTA in terms of coverage of areas and the type of commitments. While a traditional FTA focuses mainly on goods, a CECA/CEPA is more ambitious in terms of holistic coverage of many areas like services, investment, competition, government procurement, disputes, etc.

Secondly, CEPA/CECA looks deeper at the regulatory aspects of trade than an FTA. It encompasses mutual recognition agreements that cover the regulatory regimes of the partners. An MRA recognizes different regulatory regimes of partners on the presumption that they achieve the same objectives.

Why are almost all the countries signing FTAs? Countries negotiate Free Trade Agreements for several reasons:

1. By eliminating tariffs and some non-tariff barriers, Free Trade Agreement partners get easier market access into each other’s markets.
2. Exporters prefer FTAs to multilateral trade liberalization because they receive preferential treatment over non-FTA member country competitors. For instance, ASEAN has a Free Trade Agreement with India but not with Canada. ASEAN’s customs duty on leather shoes is 20%, but under the FTAs with India, it reduced duties to zero. Assuming other costs are equal, an Indian exporter, because of this duty preference, will be more competitive than a Canadian exporter of shoes. Secondly, FTAs may also protect local exporters from losing out to foreign companies that might receive preferential treatment under other FTAs.
3. The possibility of increased foreign investment from outside the FTA. Consider two countries, A and B, having an FTA. Country A has high tariffs and a large domestic market. The firms based in country C may decide to invest in country A to cater to A’s domestic market. However, once A and B sign an FTA and B offers a better business environment, C may decide to locate its plant in B to supply its products to A.
4. Slow progress in multilateral negotiations due to complexities arising from a large number of countries to reach a consensus on polarizing issues may have provided the impetus for FTAs.

How is India placed globally in terms of its bilateral FTAs/PTAs/CEPAs/CECAs? India has preferential access, economic cooperation, and Free Trade Agreements (FTAs) with about 54 individual countries. India has signed bilateral trade deals in the form of Comprehensive Economic Cooperation Agreements (CECAs) / Comprehensive Economic Partnership Agreements (CEPAs) / Free Trade Agreements (FTAs) / Preferential Trade Agreements (PTAs) with some 18 countries. India is a late and cautious starter in concluding comprehensive PTAs covering substantially all trade with some of its trading partners.

What are Rules of Origin (ROO)? Country of origin / Rules of origin (ROO) are the criteria needed to determine a product for purposes of international trade. Their significance is derived from the fact that duties and restrictions in several cases depend on the source of imports.

Rules of origin are used:

• To implement measures and instruments of commercial policy such as antidumping duties and safeguard measures.
• To determine whether imported products shall receive most-favored-nation (MFN) treatment or preferential treatment.
• For the purpose of trade statistics.
• For the application of labeling and marking requirements.
• For government procurement.

What are some of the criteria used in the Rules of Origin (RoO)? The criteria in the Rules of Origin (RoO) sets out specific and detailed conditions on the level of processing that an imported item from a non-FTA partner country must undergo in the FTA partner country (or other eligible countries in the region) before being eligible to be called an originating product of an FTA partner country. Some of the common standards used are:

1. Change in tariff class (this could be at the tariff chapter, tariff heading, or tariff sub-heading level).
2. Regional value addition.
3. Substantial processing or manufacturing by excluding some minimal operations.

Who are the authorized agencies in India for issuing the certificate of origin? The authorized agencies in India for issuing the certificate of origin are listed in Appendix 35 of the Handbook of Procedures Vol-1 under the Foreign Trade Policy.