Welcome FTA with ASEAN

It is hearty to note that the union cabinet had cleared the Free Trade Agreement (FTA) with ASEAN block. In the age of collaborations this is a must for economic and socialeastasia progress. This will facilitatate the mutual growth of ASEAN countries. Especially those who are affected by closed mindset will be benefited.

The Times of India writes (28 July 2009)
Last week, the cabinet approved a Free Trade Agreement (FTA) with the Association of Southeast Asian Nations (ASEAN). The fruit of several years of tough negotiations between the two sides, the FTA would entail reductions or removal of import duties on over 4,000 items of mutual trade. While the Manmohan Singh-led dispensation has shown welcome resolve in staying the course on the trade pact, eleventh-hour objections emanating from within and outside government need delicate, issue-specific handling. The FTA is geared to taking India’s engagement with ASEAN to the next level. It won’t do to have it nixed at the twelfth hour.

Some anti-FTA arguments are untenable, such as Left-sponsored ones that virtually advocate that India turn protectionist. Whether or not some countries adopt beggar-thy-neighbour policies thanks to the global crisis, India has maintained a principled stand at world forums about the perils of protectionism. The CPM’s grouse about India’s markets being thrown open at a supposedly bad time, therefore, doesn’t cut ice. Congress leader A K Antony, on his part, says Kerala’s farmers would suffer with duty cuts applied to pepper, rubber, cashew and other commodities. The government will do well to have a dedicated ministerial panel look into the concerns of Kerala’s plantation sector.

India-ASEAN trade has risen from around $7 billion in 2000-01 to $39 billion in 2007-08. With tariffs rationalised, it is expected to balloon many times over. Plus, Indian exporters will gain access to the $1.1 trillion ASEAN market. Fears about influx of foreign goods flattening domestic players are unfounded if India’s experience with cheap Chinese imports is anything to go by. If anything, trade regularisation via FTAs creates an institutional framework that spells out the rules of the game. There’s also the bigger picture. Asia’s globally recognised economic clout in the 21st century would be reinforced if Asian nations did business with each other on the basis of mutual synergies.

Part of the post-Cold War shift in India’s worldview and its switch to pragmatism as the core of foreign policy, India-ASEAN ties have more than economic dimensions. They are key to the Look East policy, whereby post-reforms India sought room for diplomatic manoeuvre beyond its South Asian confines. The interests of ASEAN, one of the world’s biggest trade blocs, were equally served by engaging with an Asian counterweight to China. Trade and investment as well as cooperation on global issues have driven India’s Look East initiative. Signing the FTA will signal its continuing commitment to economic integration and political cooperation with South East Asia.