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[Diplomacy] India ASEAN 20 years of Dialogue Partnership, FTA in ServiceInvestment, Vision 2020

1. Prologue

2. ASEAN: Origin

1. Musyawarah And Mufakat

2. TAC Treaty

3. ASEAN: Growth

4. ASEAN Community (2015)

5. ASEAN the present scene

1. Good performance

2. Not so Good performance

3. India-ASEAN Relations

1. Why ASEAN important for India?

2. India-ASEAN Trade relations

3. Trade Agreements

1. FTA in Goods

2. FTA in services and Investment

4. ASEAN – India Commemorative Summit 2012

1. #1: India-ASEAN car rally

2. #2: Naval Expedition

3. #3: India-ASEAN Vision – 2020 document

4. More co-op in regional forums

5. Maritime Cooperation

6. Development front

7. Renewable Energy

8. Funding

9. Socio-Cultural

10. Monuments

11. Connectivity

5. Delhi Dialogue

6. India ASEAN logo

7. ASEAN-India Eminent Persons Group (AIEPG)

4. Mock Questions

Prologue

You know the rule, whenever someone/something’s birth/death anniversary is inthe multiple of 10, 15,25…then it becomes important for UPSC. (Whether

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UPSC will actually ask any question or not, that’s a different matter!)Anyways ASEAN topic becomes important because in the end of 2012, twoimportant developments took place

1. 20th Anniversary of India-ASEAN dialogue.2. India-ASEAN FTA in service & investment was signed.

ASEAN: Origin

Recall the Article on Colonization of Asia. We had seen how the British, French andAmericans had colonized almost entire South Asia.After Second World War, most of these colonies attained independence. Butthey also had internal dispute regarding territories and borders.The immediate reason for the formation of ASEAN was the Indonesia-Malaysiaconflict over the control of Borneo Island.

This conflict + the then ongoing Vietnam War raised fears of increased externalinvolvement in the newly independent states.They feared that south east region would become a theatre of western vs.communalism ideologiesHence they decided to form a common platform:

a. To resolve bilateral issues among themselvesb. Present a collective front to the world.

1967, five countries signed “Bangkok declaration” to form the Association ofSoutheast Asian Nations (ASEAN).

1. Indonesia (ASEAN HQ is here, in Jakarta)2. Malaysia3. Philippines4. Singapore5. Thailand

Today ASEAN has ten members

6. Brunei7. Cambodia8. Laos9. Vietnam

10. Myanmar

Musyawarah And Mufakat

As a group, ASEAN follows the principle of “ASEAN way”. It means following

1. Musyawarah And Mufakat [deliberation and consensus]2. don’t use force/confrontation3. don’t interfere in the internal matters of states



4. Informal discussion5. minimal institutionalization

To achieve “the ASEAN way”, Treaty of Amity and Cooperation in Southeast Asia(TAC) was signed.

TAC Treaty

It provides the guiding principles of ASEAN

1. they’ll not interfere in the internal affairs of one another,2. they’ll not use threat or use of force to settle differences / disputes3. they’ll settle of differences or disputes by peaceful means,4. They’ll effectively cooperate among themselves.5. they’ll mutually respect each other’s’ independence, sovereignty, equality,

territorial integrity and national identity6. Every State has right lead its national existence free from external interference,

subversion or coercion,

India had signed TAC treaty with ASEAN in 2003.

ASEAN: Growth

1994 ASEAN regional forum (ARF). already discussed in separate article click me

1997

ASEAN+3 is formed to increase regional integration. This includes

1. China2. Japan3. South Korea

2002 Treaty to control haze pollution in South East Asia

2006 ASEAN gets observer status in UNGA (General assembly)

2007 Cebu declaration for energy securities and renewable energy.

2010

Chiang Mai Initiative (CMI)

It is a currency swap agreement among ASEAN +3,It provides emergency liquidity to those economies during crises.

2012

Asean Human Rights Declaration

21st ASEAN Summit in Phnom Penh Combodia with theme:“ASEAN:One Community, One Destiny”

2013 22nd ASEAN summit in Brunei, theme: Our People, Our FutureTogether.

http://mrunal.org/2012/06/diplomacy-arf.html



2015 ASEAN community will be setup.

Today ASEAN is a mammoth regional body that covers economic, security,diplomatic, environmental and cultural issues.

ASEAN Community (2015)

Similar to European Union. will be setup in 2015 and will have three pillars

1. ASEAN Political Security Community2. ASEAN Economic Community3. ASEAN Socio-Cultural Community

ASEAN the present scene

ASEAN has a mixed record of achievements since its formation.

Good performance

Peace

Successfully maintaining peace in the region. e.g. duringThailand and Cambodia conflict over Preah Vihear temple(2011)

Economy

Has made comprehensive deals like

ASEAN Free Trade Area (AFTA)ASEAN Comprehensive Investment Area(ACIA)Chiang Mai Initiative (CMI)

Aims to setup the ASEAN Economic Community 2015, having asingle market and production base.

Not so Good performance

Economy ASEAN Failed to prevent the 1997 financial crisis.

Humanrights

ASEAN has been too soft on the authoritarian regimeof Myanmar.Despite call from international community it didn’tsuspend Myanmar or put economic sanction on itduring the military regime’s crackdown on peacefulprotestors.2012: ASEAN released declaration on Human rights.



But led to lot of protests from civil society andNGOs. They terms it as just another piece of paper.

Environment

In 2002, ASEAN came up with Treaty to control hazepollution in South East Asia. still there wereoutbreaks of Haze in 2005 and 06.ASEAN also has mechanism for wildlife protection.Yet it hasn’t drastically reduced the illegal trade inendangered species (especially for medicine) .

Chinese Arm twisting

ASEAN is becoming a victim of Chinese assertiveness/pseudo-bullying. forexamplein the last meeting of ASEAN (Dec 2012@ Phnom Penh), no joint communiquewas issued. (for the first time in the 45 years of history of ASEAN Summits)

Reason?

Cambodia (host of the summit) is an ally of ChinaChina did not want the joint communique text to mention South China Sea as astanding conflict.but other gang members- Vietnam, Philippines, Malaysia and Brunei wanted thetext to contain their respective grievances regarding territorial issues withChina.

In wake of such unprecedented influencing of China into the ASEAN matters, theASEAN is looking towards India like never before.India is being seen as the counter balance to China at the ASEAN platform.

Now, let’s focus on:

India-ASEAN Relations

India ASEAN Timeline (Click to Enlarge)

1990 India starts engaging with ASEAN, part of Look East Policy.

1992 India becomes a sectoral dialogue partner of ASEAN

http://mrunalpatel.com/dirwp/uploads/2013/07/Timeline-India-ASEAN.png



1996 India becomes full dialogue partner of ASEAN

2002 India starts having annual summits with ASEAN

2003India accedes to the Treaty of Amity and Cooperation in Southeast Asia(TAC)India signs counter-terrorism declaration with ASEAN.

2009FTA* in goods.This established Free Trade Area established between India-ASEAN.issue:

2012

20th Anniversary of ASEAN-India Dialogue.ASEAN – India Commemorative Summit is held.Now India becomes a strategic partner of ASEANFTA* in services and investment.

FTA or CECA?

*Some websites/news reports call it India-Asian Free Trade Agreement (FTA)instead of CECA. Although both CECA and CEPA are examples of FTAs.

anyways moving on in the topic:

We have institutionalized annual summits, ministerial consultations; and nearly25 mechanisms for dialogue and cooperation.India is actively contributing to ASEAN+1, the ASEAN Regional Forum (ARF),the East Asia Summit (EAS) and the ASEAN Defense Ministers’ Meeting(ADMM) Plus etc.

Combined Population ~1.8 billion = ~1/4th of total world population

Combined GDP ~4 trillion USD

Two way investment 40+ billion dollars in past decade

Why ASEAN important for India?

Strategically

1. The Future architecture of Asia Is going to be shaped by the US, China and India.2. Maritime boundary disputes between China and a number of ASEAN countries;

claims over South China sea = Those ASEAN countries look towards India as acounterbalance against China.

3. For India a stronger posturing at ASEAN = its stature as a global power will get agreat boost. After all, without being a strong regional player becoming globalpower = day dream.

4. they situated are at the intersections of major land and sea routes



Energy

5. ASEAN countries, particularly Myanmar, Vietnam and Malaysia can potentiallycontribute to India’s energy security.

6. Oil and natural gas deposits in the South China Sea region.7. India and several ASEAN countries are net importers of hydrocarbon. They need

to develop alternative energy sources. But R&D in renewable =need truckload ofca$H hence regional cooperation essential for financing those projects.

Economy

8. In terms of income, India-ASEAN community is roughly the size of the EU9. In terms of Trade, India-ASEAN community NAFTA.

10. The ASEAN is India’s fourth-largest trading partner after the EU, the US andChina.

11. India – ASEAN is slated to grow faster than the rest of the world due to afavorable demographic profile and growing market for goods and services.

12. India’s trade relations are shifting from West economies towards the East,comprising of Japan, China, Korea and ASEAN.

13. India-ASEAN linkage provides for large-scale movement of people, capital,ideas and creativity.

For Indian States

14. The coastal states: West Bengal, Orissa, Andhra Pradesh and Tamil Nadu arelooking to rebuild maritime links with ASEAN nations to boost their own tradeand economy.

15. Union government is also building infrastructure while in the Northeastern statesso they can engage in commerce with South East Asian nations.

Diseases

16. Pandemics and disease are no longer limited to national boundaries and haveassumed a trans-national dimension. SARS and H1N1 virus have in recent timesafflicted the region. Hence cooperation is essential between India-ASEAN.

now let’s take a look @India-ASEAN trade relations

India-ASEAN Trade relations

Year Trade /expectation (USD)

2012 75 billion

By 2015 100 billion

By 2022 200 billion

India-ASEAN trade has grown over ten times in the ten years.



ASEAN investments into India have multipliedASEAN countries too have emerged as major destinations for Indian companies.From energy resources to farm products, from materials to machinery, and fromelectronics to information technology, Indian and ASEAN companies are forgingnew partnerships of trade and investment.Small and Medium Enterprises (SME) are important for the region. So we’llprovide for linkages between SMEs in our countries.annual India-ASEAN Business Fair and ConclavesBoth parties have agreed to encourage business-to-business relations,establishing a necessary framework to strengthen private sector engagement andpublic-private partnership (PPP).

Trade Agreements

Signing year India ASEAN trade agreement

2009 In Goods

2012 In Services and Investment

FTA in Goods

signed in 2009Before this agreement, the India-ASEAN annual trade was ~30 billion but after Itjumped to ~75 billion$ in 2012.Main products: – metal parts and components, electronic components,processed fruits, ceramics, gloves and knittings, fertilizers, chemicals like fattyalcohol, coconut and vegetable oil, refined glycerine.The trade deficit has been increasing hugely in favor of ASEAN mostly becauseof the heavy import of plantation products.Cheaper palm oil from ASEAN = hurting local producers in Kerala.Our groundnut and pepper farmers also suffering due to cheaper ASEANimports.similar apprehension about Indian fisheries sector.

FTA in services and Investment

Concluded in 2012.In present times, the global trade in merchandise/goods is slowing, hence FTA inservices and investment assumes greater significance.It opens ASEAN service market to our Indian professionals: from IT, KPO, BPO,doctors, chartered accountants and lawyers etc.India’s growth story has been led by services sector. We’ve competitiveadvantages against most ASEAN countries in this sector.

Services Issue

This Trade agreement in services and investment =follows “8+1+1” pattern.



Meaning, agreement provides 3 separate arrangements for:1. for 8 countries2. for Indonesia3. For Philippines.

Indonesia and Philippines have special terms because services sector is vital fortheir economies, and they’re worried their local service sector will be hurt whilecompeting with India’s strong services sector.Biggest worry is for Philippines. Because more than 50% of their workforce isengaged in IT/outsourcing sector.recall we are facing similar issue in FTA in Goods, because of cheaper plantationproducts from ASEANAlthough India is not putting all eggs in one FTA basket. We’re also doingbilateral trade agreements with individual countries in the region. for example

FTA already done1. Singapore (CECA in ‘05)2. Malaysia (CECA in ‘11)

In process1. Indonesia2. Thailand

Investment

Indian investors want to invest in ASEANfor

ASEAN investors want to invest in Indiafor

1. IT2. automobiles3. engineering4. Pharmaceuticals.

1. construction services2. Transportation services.3. engineering services4. shipping

ASEAN – India Commemorative Summit 2012

Held in Delhi, Dec 2012 (during the same time when Delhi gang-rape protestshad erupted).To mark the 20th year anniversary of the ASEAN – India dialogueTheme: ASEAN-India Partnership for Peace, Progress and Shared Prosperity.This summit led to three outcomes

1. car rally2. naval expedition3. vision document

#1: India-ASEAN car rally



It started from Yogyakarta (Indonesia) and ended in New Delhi (India).Its Journey covered 8 out 10 ASEAN nations. (and more than 8000 kms)

But What was the purpose of this car rally?

1. To Increase jantaa’s awareness about India-ASEAN partnership, with respect to,trade-investment-tourism and people to people linkages.

2. To waste petrol and increase air pollution

#2: Naval Expedition

Part of the 20th anniversary celebration, India sent “INS Sudarshini” on a shipexpedition to ASEAN countries. (6 months, 9 countries)To enhance people-to-people and naval links between India and the ASEANnations.

Route

1. along the route of the monsoon trade winds2. Retrace the sea routes developed during the 10th to 12th centuries,

linking India with South East Asia,3. It covered most of the modern and ancient ports in ASEAN countries.

(This 13 ports were Padang, Bali, Manado, Brunei, Cebu, Manila, DaNang, Sihanoukville, Bangkok, Singapore, Klang, Phuket and Sittwe.)

Abouttheship

1. INS Sudarshini is a ‘Sail Training Ship’ built by the Goa Shipyard Ltd.2. Sudarshini = Sanskrit word meaning ‘something beautiful’ or a

provider of good omen when visited upon.

#3: India-ASEAN Vision – 2020 document

It was adopted during the Commemorative Summit held in New Delhi (Dec 2012).

http://www.flickr.com/photos/97816112@N02/9192711762/



This document..

1. Declared India and ASEAN as strategic partners.2. India agreed to support ASEAN community (to be setup in 2015).3. Work for ASEAN-India Partnership for Peace, Progress and Shared Prosperity.4. political and security, economic, socio-cultural and development cooperation

More co-op in regional forums

in future, we’ll intensify our security consultations in

Regional forums like Sub-regional forums like

1. East Asia Summit,2. ASEAN Regional

Forum (ARF)3. ASEAN Defense

Ministers’ MeetingPlus.

4. Mekong-Ganga Cooperation (MGC)5. Bay of Bengal Initiative for Multi Sectoral

Technical and Economic Cooperation(BIMSTEC)

by the way, recall that we said the similar things to America, in Kerry visit / 4th Indo-US strategic dialogue article.

Maritime Cooperation

As maritime nations, India and ASEAN nations agreed to do following:

Anti-piracyrelief during natural disasterssearch and rescue at seamaritime safety: for communication and cargofreedom of navigationfisheries: promotion, protectionPeaceful settlement of maritime disputes, as per international law includingUNCLOS.cooperate via ASEAN Maritime Forum (AMF)

Security

defense and counter-terrorism cooperationtransnational crimes, India is committed to drug-free ASEAN 2015ASEAN-India Joint Declaration for Cooperation to Combat InternationalTerrorism.

Development front

http://mrunal.org/2013/06/diplomacy-india-us-4th-strategic-dialogue-part-1-of-3-defense-nuclear-business-and-trade.html#forum



Together face common challenges related to

1. energy security2. Food security, agriculture development.3. rapid urbanization4. climate change5. education and skill development, including English language training6. drug abuse7. natural disasters

Renewable Energy

India-ASEAN already cooperating here under the CEBU declaration. (CEBUdeclaration was signed in 2007 for energy security and alternatives toconventional fuels).India accepts 100% FDI from ASEAN investors for renewable power generationprojects in India.

Funding

ASEAN-IndiaFund

$50 millionFor variety of projects in trade, science & technology,human resource development, health and pharmaceuticals,space sciences, agriculture, new and renewable energy,information and communication technology,telecommunications, transport and infrastructure, andtourism and culture.

ASEAN-IndiaGreenFund

$5 Millionfor pilot projects in the field of climate change, foradaptation and mitigation

ASEAN-IndiaS&TFund

India gave $1 million to this.To collaborate in R&D areas of common interest.

India-CLMVFund

India gave $1 million to this.for short gestation projects in Cambodia, Lao, Myanmar andVietnam.under the Mekong-Ganga Cooperation



Socio-Cultural

greater interaction between our people: particularly younger generations,students, scientists, academics, intellectuals, diplomats, media, entrepreneurs,agriculturists and artistsWe will also enhance contacts between parliamentarians, media personnel,academics and Track II institutions such as the network of think tanks.

Monuments

Study/research on India’s civilization links with ASEAN countries.Protect/restore following monuments because they show civilizational bondsbetween ASEAN countries and India

Monument Country Why important?

Angkor Wat Cambodia

By King Survyavarman II.Wat is the Khmer name for templearchitecture evolved from Indiansubcontinent.

Borobudur andPrambanan temples

Indonesia dedicated to the Brahma, Vishnu and Shiva

Wat Phu Lao Theravada Buddhist monuments.

Bagan MyanmarTheravada Buddhism. temples, pagodas andmonasteries

SukhothaiHistorical Park

Thailand Buddhist architecture

My Son Vietnamabandoned and partially ruined Hindu templesconstructed between the 4th and the 14th centuryAD

Connectivity

Joint development of infrastructure such as transport networks, ports, shipping and airconnectivity

1. India-Myanmar-Thailand TrilateralHighway

will connect North Eastern states with ASEANcountries.This highway is extended to Lao and Cambodia. Lao is a landlocked country, but this highway(+MIEC) will turn it into land-linked country.

2. Mekong-India This will connect Southeast Asia to South Asia on the



Economic Corridor(MIEC)

eastern part of India

^These will help in greater regional economic integration between ASEAN and India.

now let’s look at some minor topics:

Delhi Dialogue

India-ASEAN Delhi Dialogue is an annual international conference of politicaland economic leaders, officials, academics and opinion-makers of ASEANcountries

5th Dialogue was held in Feb 2013, theme “India and ASEAN: Partners forPeace, Progress and Stability.”

India ASEAN logo

Unveiled in 2012.It is an improvised five-spoked wind turbine,It represents energy, motion, progress, connectivity and dynamism as well as theexpanding canvas of ASEAN-India partnership.

ASEAN-India Eminent Persons Group (AIEPG)

This group was setup to review the ASEAN-India Dialogue Relations and long-term strategic partnership.Gave report in 2012.

http://www.flickr.com/photos/97816112@N02/9189915279/



Here are the major recommendations:

DiplomatIndia should install a separate ambassador in Jakarta, solely dedicatedto ASEAN-India relations.

Securityregular bilateral consultations between ASEAN and India on drugtrafficking.

Business

ASEAN-India Business Council should be reactivated.Collaborate in promoting corporate social responsibility (CSR)

setup ASEAN-India Business Portal for

exchanging of economic and trade informationeasy interface between companies and business persons.ASEAN-India Centre in India to promote trade, investment,tourism, and cultural exchanges.

Edu/HRD

Setup ASEAN-India Centre for Skill Development andVocational Education in IIT Guwahati.ASEAN and India should establish an ASEAN-India broadbandhigh speed optical fibre network to enhance virtual connectivity.This could become an ASEAN-India Broadband Corridor.Revive Nalanda University as an icon of Asian renaissance.Annual ASEAN-India Essay Competition for school/ universitystudents, on the theme of ASEAN-India relations in differentfields.

Governancerelated

ASEAN-India panel of experts to draw up a Food Security Planfor the region.regular exchange of visits by Parliamentary delegations betweenthe Indian Parliament and the ASEAN Inter ParliamentaryAssembly.

Mock Questions

5 Markers (50 words)

1. Treaty of Amity and Cooperation in Southeast Asia (TAC)2. Delhi Dialogue3. India ASEAN logo4. India-ASEAN car rally5. Naval Expedition of INS Sudarshini6. India-Myanmar-Thailand Trilateral Highway



12 marks

1. What are the roadblocks/future impediments according to you in effectiveimplementation of FTA in services and investments between India and ASEAN.

2. Write a note on the ASEAN – India Commemorative Summit 2012.3. Provide an account of India’s increasing involvement in the South – East Asian

region.4. Write a note on Indian Diaspora in South East Asia.

25 marks

1. Twenty years of India-ASEAN relations.2. The ASEAN way of musyawarah and mufakat resonates with India’s foreign

policy and world view. Comment3. India ASEAN vision 20204. Explain the importance of ASEAN for India’s look east policy5. Enumerate the strategic and economic interests of India in South East Asia. How

can ASEAN help achieving them?6. A healthy relation with ASEAN nations can help transform the Indian economy in

general and Northeast India in particular. Explain7. There is tremendous scope for India to leverage its soft power in South East

Asia. Elaborate.8. Chinese assertiveness in ASEAN is both an opportunity and a challenge for India.

Comment.9. While India had signed a FTA in goods with ASEAN in 2009, the two sides have

recently concluded a FTA in services. Examine the impact of 2009 FTA in goodsand analyze the future potential of FTA in services and investment.

Ref

1. Major Inputs from Ms.Shalini Rai2. Ch.10, International Relations, Peu Ghosh

3. aseanindia.com/press-release4. delhidialogue.org5. http://www.indianexpress.com/news/a-richer-partnership/1052587/0

URL to article: http://mrunal.org/2013/07/diplomacy-india-asean-20-years-of-dialogue-partnership-fta-in-service-investment-vision-2020.html

Posted By Mrunal On 02/07/2013 @ 17:46 In the category Diplomacy

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