Trade deals and inter-ministerial consultations
There was a disturbing news item in the Economic times yesterday. The heading read "Finance ministry takes exception to commerce ministry OK-ing trade pacts; to take over negotiation of all investment pacts".
The commerce department under Ministry of Commerce is the nodal department for all international trade negotiations. It usually seeks views and opinion from other departments/ministries while taking stands. However, there seems to be some disconnect lately. A part of the news item reads:
Finance Minister P Chidambaram had raised concerns at Thursday's Cabinet meeting over the pact's text, which had been decided without consulting his ministry, after which the proposal was deferred.The finance ministry, which is the administrative department for India's investment policy, was neither consulted by the commerce department during the talks nor were its views sought when the draft text of the pact was finalised.
The above difference was noticed while the cabinet went through the text of Indo-Asean comprehensive economic partnership agreement concluded recently.
If it was a lapse, it must be rectified and mechanism must be put in place so that such errors do no happen in future. If it was intentional, which I hope was not the case, the delinquent elements must be fixed.
Also, finance ministry should refrain from trying to take over trade negotiations through back door. It should stick to giving its views/opinions. It doesn't have the institutional ability to operate in these areas, as of now.