Positive outcome

SECOND EDIT

From India’s point of view a  positive outcome of the seventh India-ASEAN summit which concluded in Thailand last week was the decision to expedite negotiations to finalise an agreement on investment and services. The call to set up an international university at Nalanda was another. The proposed agreement will be a follow-up to the India-ASEAN free trade agreement which has been concluded and it would benefit India more because the country, with the nature of its economy and its talent pool, can take better advantage of the opportunities in the south-east Asian region. India will have large deficits in its trade with the bloc, which is expected to grow to $50 billion by next year, but the advantage in the service and investment sectors will strengthen its economic relations with the region. The target date set for the agreement is December 2009 but it might take longer considering the long and difficult history of negotiations on the free trade agreement and the reluctance of the ASEAN countries to relax the barriers in the two areas.

Prime Minister Manmohan Singh’s statement at the summit which called for promotion of trade, technology and investment flows through open, orderly and predictable channels pointed to the need for the new agreement. All this could help in better economic integration of India with the ASEAN countries and could lead to the creation of a wider Asian economic community. The prime minister also proposed the setting up of a joint task force to explore more areas of partnership so that the 10th India-ASEAN summit in 2012 would have a substantive outcome. The proposal jells with the idea of an East Asian Community, on the lines of the European Community, suggested at the main East Asia summit by Japan and Australia.

The proposal is still nebulous and has a long way to go. There are various views on its nature, structure and membership. The different historical experiences, cultural traditions and political systems and diverging interests of member countries are major challenges. But the very fact that it is being discussed shows the willingness to look for commonalities and build on them. The ASEAN will be the core of such a community but India, Australia and even the US would like to be a part of it.

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