The 13th ASEAN Summit held on 18-22 November 2007 in Singapore became an occasion to reaffirm regional integration of economies. On the eve of the summit, Singapore Prime Minister Lee Hsien Loong, in his capacity as ASEAN Chairman addressed the member countries and offered a neutral core around which the rest of Asia could build economic ties and regional framework of cooperation. The event was more than a meeting of heads of the governments of ASEAN but attracted more than a thousand delegates from 43 countries and organisations.

Prime Minister Hsien Loon urged the ASEAN countries to implement both the Charter and Economic Community Blueprint to provide a platform for a single market and production base by the year 2015. For the first time in the 40 long years of ASEAN history, a Blueprint and Charter codified the basic principles and organisational rules of the association. The Charter commits ASEAN countries to democracy, enhancing good governance and rule of law with adequate safeguards for human rights and fundamental freedoms.

The ASEAN, comprising Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam, has emerged as a cohesive group. The theme of the summit, ‘One ASEAN at the Heart of Dynamic Asia’ was a fair attempt to highlight the ten-nation bloc’s shared aspirations to the world. In fact, the concept of ‘One ASEAN’ captured the notion of the association’s goal towards closer integration and ‘At the Heart’ contained the idea of ASEAN’s centrality in the economic renaissance of ‘Dynamic Asia’.

The Charter

As it represented a common vision and commitment to the development among the member countries, the chairman celebrated the signing of ASEAN Charter for peace, stability, sustained economic development, shared prosperity, and social progress.

The 31-page Charter included provisions for leaders to meet twice a year, new rules for settling disputes peacefully, more flexible decision-making processes, and steps to beef up the organisational structure of the grouping to be able to monitor and implement what have been agreed upon.

PM Hsien Loong welcomed Thailand’s offer to host a special ceremony to celebrate the enforcement of the Charter in the next summit at Saranrom Palace where the historic ASEAN Declaration was signed in 1967. The Charter calls for a region that is free from nuclear weapons, poverty, environmental pollution and reiterates commitment for an integrated market that allows free flow of goods, services, investments, and professionals.

Common Effective Preferential Tariff (CEPT)

The member states resolved to work for further integration as in 1992. A Common Effective Preferential Tariff (CEPT) was signed to phase out tariffs. The concept of Asian Free Trade Area flows from the concept of CEPT. However, ushering in a free trade area also means facing challenges like opening up of strategic sectors to foreign companies. Way back in 1990, Malaysia proposed the creation of an East Asia Economic Caucus comprising the then members of the ASEAN along with China, Japan, and South Korea.

India-ASEAN FTA

As far as India was concerned, strengthening of trade, economic, and regional relations with East Asian countries topped the agenda. The 6th India-ASEAN Summit and 3rd East Asia Summit held on 21 November 2007 had Prime Minister Dr Manmohan Singh addressing it and calling for expansion of cooperation between India and ASEAN nations. India-ASEAN trade has reached US$30 billion surpassing all expectations. Mooting further growth, Dr Singh proposed a target of US$50 billion of trade by 2010.

The issue of FTA between India and ASEAN now depends more on political will. In spite of the Prime Minister’s proposal for signing India-ASEAN FTA by March 2008, there are many hurdles in the path. India is particular that the agreement should be under the framework of a ‘win-win situation’ for both sides.

The main stumbling blocks on the progress of FTA are about reducing import tariff on palm oil, coconut oil, coffee and tea which India fears would harm its farmers. This bears out from the statement of Indian Commerce Secretary GK Pillai, who said, “India will hold bilateral meetings with ASEAN members to resolve the pending issues on import duty cut in the said items—the factor that has been holding up the agreement so far. India, however, is looking for essential flexibility and determination to achieve the objectives of entering the free trade pact.”

Other than the issue of tariffs on commodities basket, there may be issues on petroleum products related to Brunei. India’s tariff on petroleum products is only 5 percent and as a major importer of petroleum products India did not see any issue with the ASEAN as a ‘real market access’ question. India’s Commerce and Industry Minister Kamal Nath exuded confidence that India-ASEAN convergence and the Singapore government too shared the minister’s optimism and indicated that a few issues relating to preferential access for a few products remained to be sorted out.

Cooperation with China, Japan

Chinese Prime Minister Wen Jaibao and Japanese Prime Minister Yasuo Fukuda attended the summit. On the sidelines of the meet, Dr Manmohan Singh and the Chinese leader had a meeting and they deliberated on how the two neighbouring countries can expand bilateral ties in the fields of energy security and climate change.

The Indian PM reviewed the progress on the dedicated freight corridor and Delhi-Mumbai industrial corridor in his meeting with Japanese counterpart. The two leaders expressed their view that East Asia Summit is an important building block for creating Asian Economic Community and pledged to work closely to further this objective.

South East Asian countries have historical records of having a rich repertoire of traditional medicines. Dr Singh called for joint production of medical formulations and greater cooperation in traditional medicine systems familiar in ASEAN countries and India. He also proposed the setting up of India-ASEAN Network on Climate Change that would pool and share expertise, exchange best practices, and submit recommendations for common positions based on national priorities.

Dr Singh proposed for India-ASEAN Green Fund with an initial contribution of US$5 million for pilot projects to promote adaptation and mitigation technologies. Tourism sector is another hot spot where India-ASEAN cooperation could expand at the fastest. India is expected to greet one million tourists by 2010. The current year itself will be golden period for magnetising tourists as New Delhi is hosting the Common Wealth Games.

Look East Policy

As far as the prospects of trade expansion are concerned, the ASEAN countries are to play significant roles in India’s Look East Policy. For instance, the cooperation will assist in boosting the framework of the ongoing Indo-Thai FTA. The presence of other ASEAN members like Myanmar and Vietnam, closely located to the northeast of India, will be an added advantage. “India has a stake in ASEAN’s stability and prosperity just as we believe ASEAN has a stake in the transformation that India is experiencing. India’s relationship with ASEAN countries is the pillar of our Look East Policy”, said Dr Singh.

Ever since India became a dialogue partner of ASEAN 15 years ago, the country has taken substantial strides in integrating the economies, societies, and institutions. India with its closest eastern neighbour Myanmar had the road show on SME India 2007. Under the plan, the two countries could establish a joint project for the Northeast states to conduct trade directly with South-East Asia through Myanmar’s Sittwe Port bypassing Bangladesh.

“To facilitate trade between India and ASEAN, simplification of visa regime should be agreed upon so that businessmen from India can travel more easily to ASEAN countries and the vice versa”, said Dr Singh. The Indian Prime Minister further stated that the country is keen to join open skies regime among ASEAN nations to achieve better flight connectivity. The PM also proposed the setting up of an India–ASEAN network on climate change for sharing of expertise.