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Bilateral relations: How Asean and India can sustain in International ground

Vidhi Sanwal
Delhi School of Economics

Introduction
ASEAN, established in 1967, has completed 44years and seems to have come out of its mid-life crisis, when it was often dubbed as a talking shop. It has been successful in resolving the minor conflicts that have erupted in the region making South East Asia as one of the more stable and peaceful regions in the world. ASEAN has maintained close relations with all the neighboring nations and in monitoring the political security in the region. India in pursuance of its Look- East Policy has taken an active part in these summits and has laid a firm ground work for greater India- ASEAN Cooperation.

The study aims to establish certain significant conclusions regarding the India-ASEAN free trade agreement. There is a vast amount of literature on the subject and a few significant works have been incorporated in the present study. This work is an effort to showcase the hidden complexities in the signing of the India-ASEAN FTA (Free Trade Agreement) Under the India-ASEAN frame, the idea is to come up with an overall regional trade and investment agreement, including an FTA on goods, services and investment. After quite some debate especially over rules of origin and the impact of ASEAN agricultural imports on Indian farmers the India-ASEAN FTA is now set to enter into force on 1 January 10 2007. India is also part of IBSA, the India-Brazil-South Africa triangle considering a trilateral FTA. According to Research Paper by Ramesh Sharma1 (April, 2008): Indias engagement with the ASEAN started with its Look East Policy" in 1991. India became a Sectoral Dialogue Partner of ASEAN in 1992 and a Full Dialogue Partner in 1996. Subsequently in November 2001, the ASEAN-India relationship was upgraded to the summit level. An ASEAN-India Trade Negotiating Committee (TNC) has held numerous negotiations for establishing an ASEAN-India Regional Trade and Investment Area (RTIA) which includes a FTA in goods, services and investment. The deadline for concluding the FTA negotiations by end June 2006 and for implementing the FTA from 1 January 2007 was missed. A deal was expected in November 2007 also, but did not materialize. From this research it seems clear that several initiatives have been taken for establishing free trading between India and ASEAN member countries but it did not worked out. Though the reviewed works succeeds in forming certain critical issues surrounding the India-ASEAN free trade agreement, they fail to mention any future solution that needs to be implemented in order to improve the performance on international ground. Further, they stress upon the fact that recent bilateral and sub-regional efforts to strengthen economic relations are being complemented through an effort by India to intensify its economic relations with ASEAN as a whole. The aim was to increase bilateral merchandise trade between ASEAN and India

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The author is Senior Economist (Trade) in the Trade Policy Service, Trade and Markets Division of the Food and Agriculture Organization (FAO) of the United Nations.

Tuli Sinha (2005), in her paper titled INDIA-ASEAN FREE TRADE AGREEMENT

A SURVEY OF LITERATURE analysis of the economic scenario in the AsiaPacific region and a macro overview of the trade creation potential of an agreement on trade in services among members of ASEAN and India. IndiaSoutheast Asia ties, both with ASEAN as an organization and with individual member
countries, remained active throughout 2007. However, on key issues such as conclusion of an FTA, the year ended without success.

Rajeev Sharma (2012) suggest in his detailed article, titled India Cozies Up to Thailand: Thailand is an important ASEAN power and also a vibrant economy. Its not just trade and commerce or security and counter-terrorism issues that necessitate a closer interaction between India and ASEAN but the strategic imperatives also demand that India continues to go down this road. Actually India ought to have started this at least a decade ago when China started its string of pearls strategy to ensure Indias strategic encirclement. Thailand pledged support to Indias candidature for permanent membership of the United Nations Security Council. Col R Hariharans article titled Chinas Impact on India-Nepal Relations : talks about how ASEAN group, who do not vocalize their concerns over this development for reasons of real politic, are equally uncomfortable though China is fully established as a trading partner among them. India has contributed significantly for Nepals development over the years. On trade and transit issues also there had been the strong differences between the two countries as land-locked Nepal was keen to diversify its trade access to other countries over riding Indian concerns. Chinas trade with Nepal had been growing fast, although it is overwhelmingly weighted in favor of China. In 2010-11 bilateral trade was at Nepal Rs 45.63 billion (Nepal Rs 100=$ 1.2) although Nepal exported goods worth only NRs 746 million. But as Tibet develops further the two-way trade would flourish further when multiple communication links with Nepal are completed. Thus as India-China relations get more complex we can expect Chinas multifaceted involvement in Nepal will also to increase in form and content.

And as Chinese land and rail links improve with Nepal, its strategic options against India will also multiply. So India will have to fine tune its relationship with Nepal to be more responsive to changing dynamics of strategic environment, drawing upon the advantages it enjoys and try to overcome the latent anti-Indian sentiment. This is the reality. Dr Subhash Kapila in China-India Relations Heading Towards Deep Freeze explains China-India relations were always in a freeze over the last six decades despite the veneer that both China and India gave by rhetorical flourishes that China and India were committed to peace and tranquility on the contested border between India and China-Occupied Tibet. China can be expected to emerge more aggressive, more prone to brinkmanship and more prone to indulge in limited conflicts on its peripheries where it is involved in territorial disputes with its neighbors. China-India relations heading for an undoubted deep freeze is inevitable as the issues that divide China and India become more implacable due to Chinas strategic imperial condescension against India is now sought to be resisted by an India becoming more confident of its power potential and flowing from it the strategic recognition being bestowed on India in relation to China. The study on bilateral relations among influential countries by D.S. Ranjan focuses on five firm indicators of Washingtons shift of strategic focus from the Middle East to East Asia. Firstly, in the economic front, the US is promoting a concept of Trans- Pacific Partnership (TPP), which does not include China; Beijing is suspicious of TPP aims as those directed at diluting the importance of ASEAN plus 3 mechanism being supported by the PRC as the main driving force for regional integration. Secondly, the US participated for the first time in the East Asia Summit at Bali with an implied stand in favour of managing Chinas rise. Third comes the holding of the first US-India-Japan trilateral dialogue at Washington on 19 December 2011, about which the Chinese official media have already expressed wariness. Fourthly, as a sore point for Beijing again, the US and Australia agreed over rotation of US troops through a base in Darwin in Northern Australia, during President Obamas Asia tour in November 2011. Lastly, the US formulated its new post-Iraq and post-Afghanistan defence strategy.

From his findings it is concluded that Strategic issues dividing China and some ASEAN nations have become deeper as a result of Chinas growing territorial assertiveness. A study in the same field by Rajay Kumar Aggrawal unravel the limitation that member countries of ASEAN and India are competing against each other in a number of overseas markets with each other. This competition may hurt the spirit of Free Trade Agreement between India and ASEAN. Prashanth Parameswaran in his report on Strengthening ASEAN-India relations in the 21st Century explains that India sees economic engagement with ASEAN as a way to develop its poorer north eastern states, while ASEAN views Indias trade with Cambodia, Laos, Myanmar and Vietnam (or CLMV) as an opportunity to help these newer, less-developed members of the organization catch up and further intra-ASEAN trade and unity. While the attention is often on the economics of the relationship, ASEAN and India have much to gain from cooperation beyond this area. Security-wise, Indias shared maritime borders with Indonesia and Thailand, and long land border with Myanmar, means that India and ASEAN share joint concerns about and interests in counter-terrorism, anti-piracy, counter-narcotics, and sea lane protection. And also that ASEAN and India can both find each other useful when facing the strategic challenge posed by the rise of China in Asia. For India, South East Asia presents one avenue to diversify its relationships in the face of Beijings growing influence in the region. It has been concluded from his study that The robust cultural and civilizational connections between ASEAN and India in the past and the common interests that both parties share today means that there is significant potential for the development of a strong partnership for tomorrow. But an agenda for a future partnership is not forged by common interests alone. It will require bold decisions, innovative policies, and smart politics on the part of ASEAN and Indian leaders in order to both get past potential obstacles as well as push through initiatives that provide opportunities for enhancing the relationship. Only then can both parties get to a strong ASEAN-Indian partnership for the 21stcentury, an outcome that is beneficial not only to India and Southeast Asia, but the wider Asia-Pacific region as well. A joint study conducted by Rahul Sen, Mukul G, Asher and Ramkrishen S.Rajan on ASEAN-India Economic Relations suggests that the density of economic and political interactions between ASEAN and India have been increasing, the Indian side has been somewhat disappointed at the lack of progress in the

evolution of the mindset among ASEAN elites in some countries towards deepening engagement with India. They further gave stress that the vital element in fructifying and sustaining the dynamics of this emerging economic relationship would be to develop trust and confidence in each other and operationalize the framework agreement. It is essential that the media and elites on both sides make every effort to address the current information and perception gaps and mind-sets that hinder the pace and scope for economic cooperation between ASEAN and India. The significant complementarities that exist between ASEAN and India can only be realized if and when these ideological and informational blinders are lifted.

Conclusion
In the absence of any strategic competition within the region, with some countries having gone into a shell, and with the increased availability of additional resources due to the booming Chinese economy, China has continually been expanding her presence and influence in ASEAN. Indias somewhat hesitant efforts to improve political, economic and military relations with the ASEAN countries require to be intensified without any further delay. When we consider relations with big powers, we have to take into account all countries and entities that would be economically powerful in the next few years. We have to factor in the reality that some of them would attempt of leverage economic power into political clout and attempt to influence other countries. India has to make a special effort to be visibly neutral unless otherwise dictated by national interest.

REFERENCES

Kuppuswamy, C.S. (2011) ASEAN: World Leaders meet at Bali www.southasiananalysis.org/papers48/paper4782, Nov2011 Sharma, Ramesh (2008), China, India and AFTA: Evolving bilateral Agricultural trade and new opportunities through free trade agreements, FAO Commodity and Trade Policy Research Working Paper No.24, April 2008

Sinha, Tuli (2009),India-ASEAN free trade agreement; A survey of Literature, IPCS Special Report, Paper No.75, 3-5, June 2009 Sharma, Rajeev (2012), :INDIA COZIES UP TO THAILAND, www.southasiananalysis.org/papers49/paper4886, Jan 2012 Hariharan, Col R,(2011) Chinas Impact on India-Nepal Relations, http://www.southasiaanalysis.org/papers48/paper4780.html, Nov 2011 Kapila, Dr Subhash (2011), China India Relation Heading Towards Deep Freeze www.southasiaanalysis.org/papers48/paper4790.html, Nov 2011 Ranjan, D.S, (2012) US, China & Developments in Southeast Asia www.southasiaanalysis.org/papers49/paper4888.html, Jan 2012 Parameswaran, Prashanth (2010), Strengthening ASEAN- India Relations in the 21st Century The project 2049 Institute, 27 May, 2010 Sen, R., Asher, M.G. and Rajan, R.S. (2004), ASEAN- INDIA ECONOMIC

RELATIONS: CURRENT STATUS AND FUTURE PROSPECTS April 2004, 24-31 Aggarwal, Kumar, Rajay, A Research Paper on Benefits of Preferential Trade Agreement with ASEAN Countries in Agriculture and Commerce Sector, 8-12