Free trade agreement centerpiece of new India

Monday, 15 January 2007, 06:00 Hrs
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CEBU(Philippines): India Sunday took its burgeoning economic and strategic ties with ASEAN to a new level by agreeing to finalise a defining free trade agreement with the 10-member grouping this year, forging greater connectivity and closely cooperating with the region in areas ranging from agriculture and technology to energy, defence and counter- terrorism.

The centerpiece of this accelerated engagement with India, a rising power with a fast growing economy and this culturally akin and economically vibrant region, will be an India-ASEAN FTA that will take bilateral trade much beyond the current $23 billion soon and bring the peoples of the two region into a "web of mutually beneficial partnerships."

India and the ASEAN have agreed to finalise and sign an FTA that will exclude only five per cent of their bilateral trade, by July this year. The FTA will exclude the 490 items that are part of the negative list. Both sides have been doing hard bargaining over this for the last few years.

In a compromise solution, both sides have proposed that they will discuss the phased reduction of tariffs on four items in the highly sensitive list - pepper, crude and refined palm oil and black tea.

"I believe that the India-ASEAN FTA will impart even further momentum to this growth in trade. We are strongly committed to its early conclusion and implementation," Indian Prime Minister Manmohan Singh told leaders of the Association of Southeast Asian Nations at a summit with India here.

"We should direct our trade ministers to expedite the negotiations so that the FTA can be finalised, as agreed, by July 2007," he said.

Manmohan Singh also met Chinese Premier Wen Jiabao, Malaysian President Abdullah Ahmad Badawi and Philippine President Gloria Macapagal Arroyo on the sidelines of the summit and discussed with them a wide range of bilateral and global issues including maritime security, the fight against international terrorism and the World Trade Organisation negotiations.

The meeting with the Chinese premier acquired an added significance coming as it did days before the two sides hold talks on their border dispute in New Delhi Wednesday. Manmohan Singh also promised Wen that he will visit China later this year.

The broader idea behind an India-ASEAN FTA and the multifaceted engagement between the two sides is to fashion the larger Asian Economic Community - an idea that was espoused by Manmohan Singh again and that links up to the forward thrust of India's Look East policy.

"I would also like to use this opportunity to re-iterate that India remains committed to continuing its support for the Initiative for ASEAN Integration," he added.

"In the present phase of our "Look East" policy, we in India seek to deepen our economic integration by entering into Free Trade or Comprehensive Economic Partnership Agreements, both with ASEAN as a whole and with individual countries of the region," Manmohan Singh said at the 5th India-ASEAN summit here.

"Such agreements are already under different stages of discussion or implementation with Singapore, Thailand, Malaysia and Indonesia," he said.

"This web of mutually beneficial partnerships can, we believe, be brought together in a Pan Asian FTA that could light up the future of this region," he added.

This forward momentum in India's eastward quest found enthusiastic support from 10 ASEAN leaders. "All ASEAN leaders were appreciative of the pace at which things have moved," Indian Commerce Minister Kamal Nath told reporters after Manmohan Singh's speech at the summit.

In his address to ASEAN leaders, Manmohan Singh also batted vigorously for 'Brand' India and showcased to the ASEAN leaders a new vibrant India and its robust economy growing at the rate of 7 to 8 per cent per year.

"Today, India is very different from the India of 1991. It is now a vibrant economy. Our entrepreneurs are aggressively investing overseas. India has also emerged as a productive and profitable investment destination," he said.

Underlining "myriad facets" of cooperation between India and the ASEAN, Manmohan Singh said that India's Look East Policy, which was initiated a decade and a half ago, marked "a strategic shift" in India's perspective and is now bearing fruit in form of the intensification of political dialogue, expanding trade and the steadily enlarging people-to-people contacts between all the countries of the region.

India's trade with ASEAN has risen from $2.4 billion in 1990 to 23 billion in 2005. It is expected to cross $30 billion by early next year.

In particular, he stressed on promoting greater connectivity between India and the region by negotiating an open skies policy and increasing flows of tourists to connect people of the two sides culturally.

India will launch special tourism campaigns in ASEAN countries this year to attract more people from the region to soak in the sights and sounds of a new India that is taking its place in the global sun.

"India also plans to host 10 students from each of the 10 member countries of ASEAN on a trip to the sights and sounds of modern and ancient India. Centres of IT excellence will figure prominently in the itinteary," he said.

Other issues of mutual collaboration and synergy included an early operationalization of an India-ASEAN Science and Technology Development Fund.

Manmohan Singh's visit to Philippines for the ASEAN summit comes at a time when the economically vibrant East Asia region is looking at India anew as a rising Asian power and when New Delhi has improving its relations with Washington and Beijing - two key players in the region.

Manmohan Singh will push for more economic integration and cooperation on strategic issues like terrorism and maritime security at the second East Asia summit Monday. The East Asia summit comprises ASEAN, China, Japan, South Korea, India, Australia and New Zealand.

Source: IANS
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