Decoding the Indo-Singapore and Indo-Korea economic trade agreements

Abstract

The Globalization phenomenon involving shrinkage of economic distances between nations impacting the real economy and financial, capital, and manpower flows, as well as associated technological changes has profoundly impacted all countries. Regional cooperation is the need of the hour, but it is an ideal that is very difficult to attain especially in a region like the Asia-Pacific where heterogeneity is the rule and similarity is the exception. Consequently, it is natural that cooperation in this region has generally been problem-specific institutional arrangements with differing memberships and functions. However the need for deepening economic ties has been felt increasingly in the region. The India-ASEAN relationship especially has made tremendous progress. It has transformed from a sectoral dialogue partnership to a Summit-level interaction within a decade 1992- 2002. The Framework Agreement on Comprehensive Economic Cooperation between India and ASEAN signed at the Bali Summit in 2003 was another milestone in deepening the partnership. This is fruitfully complemented by the Comprehensive Economic Cooperation Agreement (CECA) signed between India and Singapore, the India-Thailand bilateral Free Trade Agreement and the likes. At the Laos Summit in 2004, the Southeast Asian countries signed a long-term partnership for peace, progress and shared prosperity based on the work done by the think-tanks of ASEAN and India. India’s engagement with ASEAN was a part of the Look East Policy (LEP) adopted in 1991 around the same time when India adopted a package of reforms to deepen her integration with the world economy. The LEP was designed to revitalize the age-old civilization and economic links between India and ASEAN and exploit the synergies for mutual benefit. At present, India is situated at the crossroads. Until the late 80s, while India was pursuing a moderately inward-oriented trade policy, at the beginning of the 90s, the policy strategy of the country took a U-turn, and the country resorted to economic liberalisation apprehending an inevitable economic crisis, it signed its first FTA with Sri Lanka. Over a period, India has gained strength from its experiences of close Economic relations with neighbouring countries. In the new millennium, India is looking forward to new markets, new partners and new arrangements for strengthening its external sector and also to maintain a high economic growth in the coming years. The CECA with Singapore was a watershed moment and the success of this agreement has made it a model for the subsequent agreements that India plans to sign with other trading partners.