The Telegraph
Since 1st March, 1999
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Atal seals Asean free trade deal

Bali, Oct. 8: Atal Bihari Vajpayee today sealed an agreement with the Association of Southeast Asian Nations, setting the framework for negotiating free trade blocs that could eventually result in an Asian common market.

The Prime Minister said most countries were switching to preferential trading arrangements and few Asian nations figured on such blocs. A trade bloc comprising India, China, South Korea and the 10 Asean nations would represent a giant free trade zone. But Vajpayee made it clear that though his proposal would benefit all Asean countries, its implementation should be left to individual members, depending on their “comfort level”.

He also put forward a “Vision 2020” document that Indian and Asean officials will work on to strengthen ties. The document will be presented at next year’s Indo-Asean summit in Laos.

The Prime Minister addressed the summit this afternoon after signing three accords, including the trade and investment framework agreement with Asean that should convert the region into a free trade area by 2011.

He also signed the Treaty on Amity and Cooperation and agreed to cooperate to combat terrorism. All three agreements reflect India’s desire to cooperate economically and politically with Asean nations.

Vajpayee said the framework for the free trade agreement should allay fears of those who blamed India for the failure of world trade talks in Cancun, adding that Delhi was reluctant to open its market to foreign investment.

He said there should be a road connecting India with Asean nations and proposed that a car rally be started, beginning in Guwahati and making its way through Myanmar and Thailand to Vietnam. The Prime Minister said the rally would spark economic and cultural interaction.

As part of this process of integration, India has agreed to let all Asean nations to fly daily from their respective capitals to Delhi, Mumbai, Calcutta and Chennai without waiting for a bilateral agreement to do so. Vajpayee’s “open skies” arrangement aims at increasing Indo-Asean interaction.

India’s trade with Asean is barely $12 billion at present, far behind China’s $54 billion and Japan’s $100 billion. But trade between India and Asean has grown by nearly 25 per cent in the last year and Delhi wishes to reach the $30 billion mark by 2007.

India has proposed an early harvest scheme with six Asean nations by which tariffs will be eliminated on at least 105 items in three years. Delhi is prepared to give the less developed Asean countries — Cambodia, Laos, Myanmar and Vietnam — an extra three years to finalise the list. It has even granted the Philippines additional time to prepare its industries to compete with Indian goods.

Foreign secretary Kanwal Sibal said India had surprised everyone by concluding negotiations on the framework agreement within 10 months as compared to the three years China took to finalise a similar pact. “It clearly says a lot about India’s political will and determination to extend economic cooperation with Asean,” he added.

Sibal said India’s signing of the Treaty of Amity and Cooperation was another example of its desire to “look east” and cooperate closely with Asean.

Speaking about the anti-terror treaty, on the lines of a similar agreement between the US and Asean, Sibal said it was significant that the accord was signed in Bali, where over 200 people died in terror bomb blasts a year ago. He said this indicated their resolve to fight this global menace.

Asked if the treaty would help India get criminals and terrorists extradited from Asean nations, Sibal said India must adopt a “realistic approach”. He said Delhi might face difficulties in the absence of an extradition treaty and agreement on mutual legal assistance.

The foreign secretary said the overwhelming support India had received on the need to fight terrorism would help it to get the support of major world players at international fora in defining terrorism.

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