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8/31/13 [Diplomacy] India ASEAN 20 years of Dialogue Partnership, FTA in Service Investment, Vision 2020 « Mrunal

mrunal.org/2013/07/diplomacy-india-asean-20-years-of-dialogue-partnership-fta-in-service-investment-vision-2020.html 1/11

[Diplomacy] India ASEAN 20 years of Dialogue Partnership, FTA in Service Investment, Vision 2020

Prologue

ASEAN: OriginMusyawarah And Mufakat

TAC Treaty

ASEAN: Growth

ASEAN Community (2015)

ASEAN the present sceneGood performance

Not so Good performance

India-ASEAN RelationsWhy ASEAN important for India?

India-ASEAN Trade relations

Trade AgreementsFTA in Goods

FTA in services and Investment

ASEAN – India Commemorative Summit 2012#1: India-ASEAN car rally

#2: Naval Expedition

#3: India-ASEAN Vision – 2020 document

More co-op in regional forums

Maritime Cooperation

Development front

Renewable Energy

Funding

Socio-Cultural

Monuments

Connectivity

Delhi Dialogue

India ASEAN logo

ASEAN-India Eminent Persons Group (AIEPG)

Mock Questions

Prologue

You know the rule, whenever someone/something’s birth/death anniversary is in the multiple of 10, 15,25…then it becomesimportant for UPSC. (Whether UPSC will actually ask any question or not, that’s a different matter!)Anyways ASEAN topic becomes important because in the end of 2012, two important developments took place

1. 20th Anniversary of India-ASEAN dialogue.2. India-ASEAN FTA in service & investment was signed.

ASEAN: Origin

Recall the Article on Colonization of Asia. We had seen how the British, French and Americans had colonized almost entireSouth Asia.After Second World War, most of these colonies attained independence. But they also had internal dispute regarding territoriesand borders.The immediate reason for the formation of ASEAN was the Indonesia-Malaysia conflict over the control of Borneo Island.

This conflict + the then ongoing Vietnam War raised fears of increased external involvement in the newly independent states.They feared that south east region would become a theatre of western vs. communalism ideologiesHence they decided to form a common platform:

a. To resolve bilateral issues among themselvesb. Present a collective front to the world.

1967, five countries signed “Bangkok declaration” to form the Association of Southeast Asian Nations (ASEAN).

1. Indonesia (ASEAN HQ is here, in Jakarta)2. Malaysia3. Philippines4. Singapore5. Thailand

HOME DIPLOMACY JULY 2ND, 2013 24 COMMENTS

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8/31/13 [Diplomacy] India ASEAN 20 years of Dialogue Partnership, FTA in Service Investment, Vision 2020 « Mrunal

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Today ASEAN has ten members

6. Brunei7. Cambodia8. Laos9. Vietnam

10. Myanmar

Musyawarah And Mufakat

As a group, ASEAN follows the principle of “ASEAN way”. It means following

1. Musyawarah And Mufakat [deliberation and consensus]2. don’t use force/confrontation3. don’t interfere in the internal matters of states4. Informal discussion5. minimal institutionalization

To achieve “the ASEAN way”, Treaty of Amity and Cooperation in Southeast Asia (TAC) was signed.

TAC Treaty

It provides the guiding principles of ASEAN

1. they’ll not interfere in the internal affairs of one another,2. they’ll not use threat or use of force to settle differences / disputes3. they’ll settle of differences or disputes by peaceful means,4. They’ll effectively cooperate among themselves.5. they’ll mutually respect each other’s’ independence, sovereignty, equality, territorial integrity and national identity6. Every State has right lead its national existence free from external interference, subversion or coercion,

India had signed TAC treaty with ASEAN in 2003.

ASEAN: Growth

1994 ASEAN regional forum (ARF). already discussed in separate article click me

1997

ASEAN+3 is formed to increase regional integration. This includes

1. China2. Japan3. South Korea

2002 Treaty to control haze pollution in South East Asia

2006 ASEAN gets observer status in UNGA (General assembly)

2007 Cebu declaration for energy securities and renewable energy.

2010

Chiang Mai Initiative (CMI)

It is a currency swap agreement among ASEAN +3,It provides emergency liquidity to those economies during crises.

2012Asean Human Rights Declaration

21st ASEAN Summit in Phnom Penh Combodia with theme:“ASEAN: One Community, One Destiny”

2013 22nd ASEAN summit in Brunei, theme: Our People, Our Future Together.

2015 ASEAN community will be setup.

Today ASEAN is a mammoth regional body that covers economic, security, diplomatic, environmental and cultural issues.

ASEAN Community (2015)

Similar to European Union. will be setup in 2015 and will have three pillars

1. ASEAN Political Security Community2. ASEAN Economic Community3. ASEAN Socio-Cultural Community

ASEAN the present scene

ASEAN has a mixed record of achievements since its formation.

Page 3: India ASEAN

8/31/13 [Diplomacy] India ASEAN 20 years of Dialogue Partnership, FTA in Service Investment, Vision 2020 « Mrunal

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Good performance

PeaceSuccessfully maintaining peace in the region. e.g. during Thailand and Cambodia conflict over Preah Viheartemple (2011)

Economy

Has made comprehensive deals like

ASEAN Free Trade Area (AFTA)ASEAN Comprehensive Investment Area(ACIA)Chiang Mai Initiative (CMI)

Aims to setup the ASEAN Economic Community 2015, having a single market and production base.

Not so Good performance

Economy ASEAN Failed to prevent the 1997 financial crisis.

Humanrights

ASEAN has been too soft on the authoritarian regime of Myanmar.Despite call from international community it didn’t suspend Myanmar or put economic sanction on itduring the military regime’s crackdown on peaceful protestors.2012: ASEAN released declaration on Human rights. But led to lot of protests from civil society andNGOs. They terms it as just another piece of paper.

Environment

In 2002, ASEAN came up with Treaty to control haze pollution in South East Asia. still there wereoutbreaks of Haze in 2005 and 06.ASEAN also has mechanism for wildlife protection. Yet it hasn’t drastically reduced the illegal trade inendangered species (especially for medicine) .

Chinese Arm twisting

ASEAN is becoming a victim of Chinese assertiveness/pseudo-bullying. for examplein the last meeting of ASEAN (Dec 2012@ Phnom Penh), no joint communique was issued. (for the first time in the 45 years ofhistory of ASEAN Summits)

Reason?

Cambodia (host of the summit) is an ally of ChinaChina did not want the joint communique text to mention South China Sea as a standing conflict.but other gang members- Vietnam, Philippines, Malaysia and Brunei wanted the text to contain their respective grievancesregarding territorial issues with China.

In wake of such unprecedented influencing of China into the ASEAN matters, the ASEAN is looking towards India like neverbefore.India is being seen as the counter balance to China at the ASEAN platform.

Now, let’s focus on:

India-ASEAN Relations

India ASEAN Timeline (Click toEnlarge)

1990 India starts engaging with ASEAN, part of Look East Policy.

1992 India becomes a sectoral dialogue partner of ASEAN

1996 India becomes full dialogue partner of ASEAN

2002 India starts having annual summits with ASEAN

2003India accedes to the Treaty of Amity and Cooperation in Southeast Asia (TAC)India signs counter-terrorism declaration withASEAN.

2009FTA* in goods.This established Free Trade Area established between India-ASEAN.issue:

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8/31/13 [Diplomacy] India ASEAN 20 years of Dialogue Partnership, FTA in Service Investment, Vision 2020 « Mrunal

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2012

20th Anniversary of ASEAN-India Dialogue.ASEAN – India Commemorative Summit is held.Now India becomes a strategic partner of ASEANFTA* in services and investment.

FTA or CECA?

*Some websites/news reports call it India-Asian Free Trade Agreement (FTA) instead of CECA. Although both CECA andCEPA are examples of FTAs.

anyways moving on in the topic:

We have institutionalized annual summits, ministerial consultations; and nearly 25 mechanisms for dialogue and cooperation.India is actively contributing to ASEAN+1, the ASEAN Regional Forum (ARF), the East Asia Summit (EAS) and the ASEANDefense Ministers’ Meeting (ADMM) Plus etc.

Combined Population ~1.8 billion = ~1/4th of total world population

Combined GDP ~4 trillion USD

Two way investment 40+ billion dollars in past decade

Why ASEAN important for India?

Strategically

1. The Future architecture of Asia Is going to be shaped by the US, China and India.2. Maritime boundary disputes between China and a number of ASEAN countries; claims over South China sea = Those ASEAN

countries look towards India as a counterbalance against China.3. For India a stronger posturing at ASEAN = its stature as a global power will get a great boost. After all, without being a strong

regional player becoming global power = day dream.4. they situated are at the intersections of major land and sea routes

Energy

5. ASEAN countries, particularly Myanmar, Vietnam and Malaysia can potentially contribute to India’s energy security.6. Oil and natural gas deposits in the South China Sea region.7. India and several ASEAN countries are net importers of hydrocarbon. They need to develop alternative energy sources. But R&D

in renewable =need truckload of ca$H hence regional cooperation essential for financing those projects.

Economy

8. In terms of income, India-ASEAN community is roughly the size of the EU9. In terms of Trade, India-ASEAN community NAFTA.

10. The ASEAN is India’s fourth-largest trading partner after the EU, the US and China.11. India – ASEAN is slated to grow faster than the rest of the world due to a favorable demographic profile and growing market for

goods and services.12. India’s trade relations are shifting from West economies towards the East, comprising of Japan, China, Korea and ASEAN.13. India-ASEAN linkage provides for large-scale movement of people, capital, ideas and creativity.

For Indian States

14. The coastal states: West Bengal, Orissa, Andhra Pradesh and Tamil Nadu are looking to rebuild maritime links with ASEANnations to boost their own trade and economy.

15. Union government is also building infrastructure while in the Northeastern states so they can engage in commerce with South EastAsian nations.

Diseases

16. Pandemics and disease are no longer limited to national boundaries and have assumed a trans-national dimension. SARS andH1N1 virus have in recent times afflicted the region. Hence cooperation is essential between India-ASEAN.

now let’s take a look @India-ASEAN trade relations

India-ASEAN Trade relations

Year Trade /expectation (USD)

2012 75 billion

By 2015 100 billion

By 2022 200 billion

India-ASEAN trade has grown over ten times in the ten years.ASEAN investments into India have multipliedASEAN countries too have emerged as major destinations for Indian companies.From energy resources to farm products, from materials to machinery, and from electronics to information technology, Indianand ASEAN companies are forging new partnerships of trade and investment.

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Small and Medium Enterprises (SME) are important for the region. So we’ll provide for linkages between SMEs in our countries.annual India-ASEAN Business Fair and ConclavesBoth parties have agreed to encourage business-to-business relations, establishing a necessary framework to strengthen privatesector engagement and public-private partnership (PPP).

Trade Agreements

Signing year India ASEAN trade agreement

2009 In Goods

2012 In Services and Investment

FTA in Goods

signed in 2009Before this agreement, the India-ASEAN annual trade was ~30 billion but after It jumped to ~75 billion$ in 2012.Main products: – metal parts and components, electronic components, processed fruits, ceramics, gloves and knittings,fertilizers, chemicals like fatty alcohol, coconut and vegetable oil, refined glycerine.The trade deficit has been increasing hugely in favor of ASEAN mostly because of the heavy import of plantation products.Cheaper palm oil from ASEAN = hurting local producers in Kerala.Our groundnut and pepper farmers also suffering due to cheaper ASEAN imports.similar apprehension about Indian fisheries sector.

FTA in services and Investment

Concluded in 2012.In present times, the global trade in merchandise/goods is slowing, hence FTA in services and investment assumes greatersignificance.It opens ASEAN service market to our Indian professionals: from IT, KPO, BPO, doctors, chartered accountants and lawyersetc.India’s growth story has been led by services sector. We’ve competitive advantages against most ASEAN countries in thissector.

Services Issue

This Trade agreement in services and investment =follows “8+1+1” pattern.Meaning, agreement provides 3 separate arrangements for:

1. for 8 countries2. for Indonesia3. For Philippines.

Indonesia and Philippines have special terms because services sector is vital for their economies, and they’re worried their localservice sector will be hurt while competing with India’s strong services sector.Biggest worry is for Philippines. Because more than 50% of their workforce is engaged in IT/outsourcing sector.recall we are facing similar issue in FTA in Goods, because of cheaper plantation products from ASEANAlthough India is not putting all eggs in one FTA basket. We’re also doing bilateral trade agreements with individual countries inthe region. for example

FTA already done1. Singapore (CECA in ‘05)2. Malaysia (CECA in ‘11)

In process1. Indonesia2. Thailand

Investment

Indian investors want to invest in ASEAN for ASEAN investors want to invest in India for

1. IT2. automobiles3. engineering4. Pharmaceuticals.

1. construction services2. Transportation services.3. engineering services4. shipping

ASEAN – India Commemorative Summit 2012

Held in Delhi, Dec 2012 (during the same time when Delhi gang-rape protests had erupted).To mark the 20th year anniversary of the ASEAN – India dialogueTheme: ASEAN-India Partnership for Peace, Progress and Shared Prosperity.This summit led to three outcomes

1. car rally2. naval expedition3. vision document

#1: India-ASEAN car rally

It started from Yogyakarta (Indonesia) and ended in New Delhi (India).

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Its Journey covered 8 out 10 ASEAN nations. (and more than 8000 kms)

But What was the purpose of this car rally?

1. To Increase jantaa’s awareness about India-ASEAN partnership, with respect to, trade-investment-tourism and people to peoplelinkages.

2. To waste petrol and increase air pollution

#2: Naval Expedition

Part of the 20th anniversary celebration, India sent “INS Sudarshini” on a ship expedition to ASEAN countries. (6 months, 9countries)To enhance people-to-people and naval links between India and the ASEAN nations.

Route

1. along the route of the monsoon trade winds2. Retrace the sea routes developed during the 10th to 12th centuries, linking India with South East Asia,3. It covered most of the modern and ancient ports in ASEAN countries. (This 13 ports were Padang, Bali, Manado,

Brunei, Cebu, Manila, Da Nang, Sihanoukville, Bangkok, Singapore, Klang, Phuket and Sittwe.)

Abouttheship

1. INS Sudarshini is a ‘Sail Training Ship’ built by the Goa Shipyard Ltd.2. Sudarshini = Sanskrit word meaning ‘something beautiful’ or a provider of good omen when visited upon.

#3: India-ASEAN Vision – 2020 document

It was adopted during the Commemorative Summit held in New Delhi (Dec 2012). This document..

1. Declared India and ASEAN as strategic partners.2. India agreed to support ASEAN community (to be setup in 2015).3. Work for ASEAN-India Partnership for Peace, Progress and Shared Prosperity.4. political and security, economic, socio-cultural and development cooperation

More co-op in regional forums

in future, we’ll intensify our security consultations in

Regional forums like Sub-regional forums like

1. East Asia Summit,2. ASEAN Regional Forum (ARF)3. ASEAN Defense Ministers’ Meeting

Plus.

4. Mekong-Ganga Cooperation (MGC)5. Bay of Bengal Initiative for Multi Sectoral Technical and Economic Cooperation

(BIMSTEC)

by the way, recall that we said the similar things to America, in Kerry visit / 4th Indo-US strategic dialogue article.

Maritime Cooperation

As maritime nations, India and ASEAN nations agreed to do following:

Anti-piracyrelief during natural disasterssearch and rescue at seamaritime safety: for communication and cargofreedom of navigationfisheries: promotion, protectionPeaceful settlement of maritime disputes, as per international law including UNCLOS.cooperate via ASEAN Maritime Forum (AMF)

Security

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defense and counter-terrorism cooperationtransnational crimes, India is committed to drug-free ASEAN 2015ASEAN-India Joint Declaration for Cooperation to Combat International Terrorism.

Development front

Together face common challenges related to

1. energy security2. Food security, agriculture development.3. rapid urbanization4. climate change5. education and skill development, including English language training6. drug abuse7. natural disasters

Renewable Energy

India-ASEAN already cooperating here under the CEBU declaration. (CEBU declaration was signed in 2007 for energy securityand alternatives to conventional fuels).India accepts 100% FDI from ASEAN investors for renewable power generation projects in India.

Funding

ASEAN-IndiaFund

$50 millionFor variety of projects in trade, science & technology, human resource development, health andpharmaceuticals, space sciences, agriculture, new and renewable energy, information and communicationtechnology, telecommunications, transport and infrastructure, and tourism and culture.

ASEAN-IndiaGreenFund

$5 Millionfor pilot projects in the field of climate change, for adaptation and mitigation

ASEAN-IndiaS&TFund

India gave $1 million to this.To collaborate in R&D areas of common interest.

India-CLMVFund

India gave $1 million to this.for short gestation projects in Cambodia, Lao, Myanmar and Vietnam.under the Mekong-Ganga Cooperation

Socio-Cultural

greater interaction between our people: particularly younger generations, students, scientists, academics, intellectuals, diplomats,media, entrepreneurs, agriculturists and artistsWe will also enhance contacts between parliamentarians, media personnel, academics and Track II institutions such as thenetwork of think tanks.

Monuments

Study/research on India’s civilization links with ASEAN countries.Protect/restore following monuments because they show civilizational bonds between ASEAN countries and India

Monument Country Why important?

Angkor Wat CambodiaBy King Survyavarman II.Wat is the Khmer name for templearchitecture evolved from Indian subcontinent.

Borobudur and Prambanantemples

Indonesia dedicated to the Brahma, Vishnu and Shiva

Wat Phu Lao Theravada Buddhist monuments.

Bagan Myanmar Theravada Buddhism. temples, pagodas and monasteries

Sukhothai Historical Park Thailand Buddhist architecture

My Son Vietnamabandoned and partially ruined Hindu temples constructed between the 4th and the14th century AD

Connectivity

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Joint development of infrastructure such as transport networks, ports, shipping and air connectivity

1. India-Myanmar-Thailand TrilateralHighway

will connect North Eastern states with ASEAN countries.This highway is extended to Lao and Cambodia. Lao is a landlocked country, but this highway (+MIEC) will turn it into land-linked country.

2. Mekong-India Economic Corridor(MIEC)

This will connect Southeast Asia to South Asia on the eastern part of India

^These will help in greater regional economic integration between ASEAN and India.

now let’s look at some minor topics:

Delhi Dialogue

India-ASEAN Delhi Dialogue is an annual international conference of political and economic leaders, officials, academics andopinion-makers of ASEAN countries

5th Dialogue was held in Feb 2013, theme “India and ASEAN: Partners for Peace, Progress and Stability.”

India ASEAN logo

Unveiled in 2012.It is an improvised five-spoked wind turbine,It represents energy, motion, progress, connectivity and dynamism as well as the expanding canvas of ASEAN-India partnership.

ASEAN-India Eminent Persons Group (AIEPG)

This group was setup to review the ASEAN-India Dialogue Relations and long-term strategic partnership.Gave report in 2012.Here are the major recommendations:

Diplomat India should install a separate ambassador in Jakarta, solely dedicated to ASEAN-India relations.

Security regular bilateral consultations between ASEAN and India on drug trafficking.

Business

ASEAN-India Business Council should be reactivated.Collaborate in promoting corporate social responsibility (CSR)

setup ASEAN-India Business Portal for

exchanging of economic and trade informationeasy interface between companies and business persons.ASEAN-India Centre in India to promote trade, investment, tourism, and cultural exchanges.

Edu/HRD

Setup ASEAN-India Centre for Skill Development and Vocational Education in IIT Guwahati.ASEAN and India should establish an ASEAN-India broadband high speed optical fibre network to enhancevirtual connectivity. This could become an ASEAN-India Broadband Corridor.Revive Nalanda University as an icon of Asian renaissance.Annual ASEAN-India Essay Competition for school/ university students, on the theme of ASEAN-Indiarelations in different fields.

Governancerelated

ASEAN-India panel of experts to draw up a Food Security Plan for the region.regular exchange of visits by Parliamentary delegations between the Indian Parliament and the ASEAN InterParliamentary Assembly.

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Mock Questions

5 Markers (50 words)

1. Treaty of Amity and Cooperation in Southeast Asia (TAC)2. Delhi Dialogue3. India ASEAN logo4. India-ASEAN car rally5. Naval Expedition of INS Sudarshini6. India-Myanmar-Thailand Trilateral Highway

12 marks

1. What are the roadblocks/future impediments according to you in effective implementation of FTA in services and investmentsbetween India and ASEAN.

2. Write a note on the ASEAN – India Commemorative Summit 2012.3. Provide an account of India’s increasing involvement in the South – East Asian region.4. Write a note on Indian Diaspora in South East Asia.

25 marks

1. Twenty years of India-ASEAN relations.2. The ASEAN way of musyawarah and mufakat resonates with India’s foreign policy and world view. Comment3. India ASEAN vision 20204. Explain the importance of ASEAN for India’s look east policy5. Enumerate the strategic and economic interests of India in South East Asia. How can ASEAN help achieving them?6. A healthy relation with ASEAN nations can help transform the Indian economy in general and Northeast India in particular.

Explain7. There is tremendous scope for India to leverage its soft power in South East Asia. Elaborate.8. Chinese assertiveness in ASEAN is both an opportunity and a challenge for India. Comment.9. While India had signed a FTA in goods with ASEAN in 2009, the two sides have recently concluded a FTA in services. Examine

the impact of 2009 FTA in goods and analyze the future potential of FTA in services and investment.

Ref

1. Major Inputs from Ms.Shalini Rai2. Ch.10, International Relations, Peu Ghosh3. aseanindia.com/press-release4. delhidialogue.org5. http://www.indianexpress.com/news/a-richer-partnership/1052587/0

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24 comments to [Diplomacy] India ASEAN 20 years of Dialogue Partnership, FTA in Service Investment,

Vision 2020

UtkarshReply to this comment

Hi Mrunal..Nice article..Tahnks:)Regarding no of countries,u have mentioned Singapore two times and may be missed Myanmar!!

vinod simha

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Reply to this comment

Mrunal,there was typo in list of ASEAN nations. Singapore is wirtten twice. Burma missing

thanks for the article

MrunalReply to this comment

fixed

Naveen ShekharReply to this comment

Great coverage !!!!!! long description related to ASEAN completed in too short.Thanks,Mr. Mrunal.Would you provide any matter pertaining to GK and English of the upcoming IFS Mains exam?

abhishek kumarReply to this comment

hi sir,i have become fan of urs

sakthiReply to this comment

very nice work ji

akshatReply to this comment

sir ur timeline part gives a complete information about when things happened related to the event….plus… one does not have to keepsearching for the same on some other site ….thanks a lot for this background of events …u would be habitual of hearing dis but u r one of dbest resources in the country…thanks again

Dhiraj KumarReply to this comment

Very nice article, sir its awesome with respect to changing scenarios of importance in international affairs.

sheoduttReply to this comment

good article sir,please provide jharkhand (pcs)

saurabhReply to this comment

what were ur sources mrunal?

GAGANDEEPReply to this comment

iwant to knouwabout ifs

sairaReply to this comment

Mrunal sir…beautifully encapsulated.I truly am awed by your rapier wit as you punctuate serious jaded stuff with innocuous humor(about carrally,the pollution,wasting petrol thing and then writing it off ) making it yet more enjoyable and engaging. thanx

PuneetReply to this comment

Sir,when I click here, It says website is unreachable.ASEAN regional forum (ARF). already discussed in separate article <>.

MrunalReply to this comment

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8/31/13 [Diplomacy] India ASEAN 20 years of Dialogue Partnership, FTA in Service Investment, Vision 2020 « Mrunal

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yes server was having some problem, it is fixed now.

swatiReply to this comment

can somebody explain what is to be included in investment models in gs 3 paper economics section.

charyReply to this comment

thanks

NamitReply to this comment

always be indebted to you mrunal .

PavanReply to this comment

Sir,Hats off to you.And my deepest gratitude.Thank you for providing such a deep knowledge in a easy pill to swallow form.

RegardsPavan

AkhilendraReply to this comment

Sir, mai hindi medium ka student hoon.aur apke article english me hain. To plz sir mujhe bataiye ki mai kaise padhai karoon. Mujhe hindi mematerial chahiye

RedReply to this comment

Thank you

tabReply to this comment

can somebody explain what is to be included in investment models in gs 3 paper economics section.its very urgent!!!!!!!!!!!!!!

RoshaniReply to this comment

Sir,The Timeline can not be opened. Message comes ‘web page is not available’. Is there any problem with this link??

amol bavaleReply to this comment

Ur a amazing, (DECODER OF DEPLOMACY) Actualy while reading news paper we dont thnk everything at a time, bt by support of urarticle, we need not to memorise the thing, bt I remember ur suggesion in some article, tht demand our effort too. Nd I got tht point, thankyou sir.

Manoj KumarReply to this comment

Dear Mrunal,Please give some points on :Chinese assertiveness in ASEAN is both an opportunity and a challenge for India.Thank you in advance.