Corporate and Regulatory Drivers
New Horizons in International Business series
Edited by Philippe Gugler and Julien Chaisse
Chapter 10: Integration Experience and Trade Performance of the Indo–ASEAN FTA: Learning by Doing to Live up to Great Expectations
Debashis Chakraborty and Dipankar Sengupta INTRODUCTION The current analysis focuses on one of India’s major regional trade initiatives in Asia, namely, the proposed free trade agreement (FTA) with the Association of Southeast Asian Nations (ASEAN). India’s ASEAN bid is of particular importance for two reasons. First, while India is involved in several other regional negotiations in Asia (for example, the Bay of Bengal Initiative for MultiSectoral Technical and Economic Cooperation Free Trade Area (BIMSTEC FTA) and the Agreement on the South Asian Free Trade Area (SAFTA)), in the case of ASEAN the extent of trade liberalization would be much broader, given the number of countries involved in this initiative. Second, it has been observed that India’s imports from Southeast Asia have risen over the past few years, and there is thus an urgent need to identify the potential gains and losses that would occur as a result of the integration process. The analysis is organized along the following lines. First the trade and tariff dynamics of the countries is briefly discussed. Then the negotiating experience so far is described. Finally a few areas of future concern are discussed. INDO-ASEAN FTA: GREAT EXPECTATIONS Despite being a member of several preferential arrangements under the ‘Enabling Clause’ (for example the Bangkok Agreement), India mostly depended on the multilateral trade liberalization route for realizing greater market access up to the late 1990s (Chakraborty, 2003). However India 207 208 Competitiveness of the ASEAN countries became increasingly dissatisfied with the slow progress of multilateral market access...
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