Bilateral relations this week: 8th Sep - 14 Sep 2014

India inks free trade agreement with ASEAN
On 8th September, the Government of India signed the long-pending pact on services, trade and investment with the Association of Southeast Asian Nations (ASEAN). This will mean more market access to the 10 countries in the bloc for our professionals. India and ASEAN already have a free trade agreement (FTA) on goods; which took effect in 2010. 

Once the FTA in services and investment gets ratified, the entire set of pacts will become a Comprehensive Economic Partnership Agreement. Nine of the 10 ASEAN countries have signed the deal but not the Philippines, due to domestic reasons. To become operational, all 10 must sign it and all the respective legislatures must ratify it. So, for that matter, must India’s Parliament.

ASEAN‘s members are Singapore, Malaysia, Thailand, Myanmar, Vietnam, Indonesia, the Philippines, Brunei, Cambodia and Laos.

The agreement on goods has not been ratified by all ASEAN members. The government had come under attack recently over the deal for the lack of increase in our exports to the region, while imports from many ASEAN member-states such as Singapore, Malaysia, Thailand and Indonesia have been rising.

Under the goods FTA, ASEAN countries and India had decided to lift import tariffs on a little more than 80 per cent of traded products by 2016. The FTA collectively covers a market of nearly 1.8 billion people and proposes to gradually slash tariffs for over 4,000 product lines.

ASEAN:
The Association of Southeast Asian Nations is a political and economic organization of ten countries located in Southeast Asia, which was formed on 8 August 1967 by Indonesia, Malaysia, the Philippines, Singapore and Thailand. Since then, membership has expanded to include Brunei, Cambodia, Laos, Myanmar (Burma) and Vietnam. Its aims include accelerating economic growth, social progress, sociocultural evolution among its members, protection of regional peace and stability, and opportunities for member countries to discuss differences peacefully