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Pact could also spur Asean integration
SOMPORN THAPANACHAI
JAKARTA : The recent failure of global trade negotiations under the World Trade Organisation was a powerful stimulus for last week's signing of the Asean-India free trade agreement, according to Asean secretary-general Surin Pitsuwan.
The 10-member Association of Southeast Asian Nations still has more free trade negotiations in the pipeline with markets including Australia, New Zealand, the European Union and the Untied States.
''The failure of the Doha Round pushed India to have some sense of urgency that it needed to have larger market for its exports and services,'' said Dr Surin.
The successful conclusion of the FTA with India will open a market of one billion people for more Asean trade and investment, and is likely to raise the significance of Southeast Asia, he said.
''Asean is in the middle [between China and India] so we can link and tap into the supply lines into the economies of China and India. We are very strategic so we can contribute to the prosperity of a larger region and also the 10 Asean members.''
Three East Asian countries _ Japan, South Korea and China _ already rely heavily on Asean for raw materials, and 80% of the energy they use either comes from or is shipped through Southeast Asia.
In order to fully benefit from wider market opportunities, Dr Surin believes Asean itself needs to accelerate its integration, especially the Asean Economic Community, the first phase of which is supposed to start in 2015.
Asean, which entered its 41st year last week, has displayed an ability to sustain itself and grow in the past four decades without open conflicts.
The group will move on to another level of integration with the full ratification of Asean Charter, expected by December, although currently only three countries _ Indonesia, the Philippines and Thailand _ have done so. However, Dr Surin is fully confident that the ratification would be completed in time for the next Asean Summit to be held in Bangkok.
He believes that the achievements of Asean as an organisation have not been fully appreciated by most people in member countries. He points to the organisation's role in delivering many services in areas of goods trading, health care, finance, disaster relief and other spheres.
The group has its own reserves totalling US$82 billion, managed by the Asian Development Bank, ready to release to help members whose currencies come under attack. It also meets regularly to compare macroeconomic data that could eventually ensure the economic stability.
One of the most challenging problems, however, remains the development gap between the group's six original members and the four relative newcomers Cambodia, Laos, Vietnam and Burma.
''Dialogue partners have expressed readiness and willingness to help Asean bridge the gaps otherwise it will be a structural defect for the Southeast Asia,'' said Dr Surin.
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