1. 1
Sr.No Topic Page No
1 Association Of South East Asian Nations 5-18
1.1 Introduction 5
1.2 History 7
1.3 Aims And Purposes 10
1.4 Fundamental Principles 11
1.5 ASEAN Emblem 12
1.6 Structure Of ASEAN 13
1.7 Environment 14
1.8 ASEAN Plus Three 15
1.9 Free Trade 16
1.0 ASEAN Way 17
2 ASEAN Charter 19
3 Meetings 21-24
3.1 ASEAN Summit 21
4 Free Trade Agreement 25
5 External Relations 26
6 ASEAN Co-Operation 28-36
6.1 Political Co-Operation 28
6.2 Economic Co-Operation 29
6.3 Co-Operation In Industrial Development 31
6.4 Co-Operation In Finance & Banking 33
6.5 Co-Operation In Services 35
6.6 Co-Operation In Minerals 36
7 India & ASEAN 37
8 Conclusion 38
2. 2
ASSOCIATION OF SOUTH EAST ASIAN NATIONS
INTRODUCTION
The ASEAN was formed with the signing of the Bankok Declaration on 8th August
1967 by countries- Indonesia, Malaysia, Phillipines, Singapore and Thailand. Since
then, membership has expanded to include Brunei, Cambodia, Laos, Myanmar
(Burma) and Vietnam. Its aims include accelerating economic growth, social
progress, sociocultural evolution among its members, protection of regional peace
and stability, and opportunities for member countries to discuss differences
peacefully.[10] United States of America supported the establishment
of ASEAN. The establishment of ASEAN shows a move towards globalization.
The principal objectives of ASEAN are to achieve economic, political, social and
cultural cooperation among its members. It has been the most successful regional
association for economic integration and peaceful coexistence in South East Asia.
Foreign trade is the life blood of the ASEAN countries following globalization and
prudent macro-economic policies. The ASEAN economies have achieved
sustained high growth rates leading to economic prosperity.
ASEAN covers a land area of 4.46 million km², which is 3% of the total land area
of Earth, and has a population of approximately 600 million people, which is 8.8%
of the world's population. The sea area of ASEAN is about three times larger than
its land counterpart. In 2012, its combined nominal GDP had grown to more than
US$2.3 trillion. If ASEAN were a single entity, it would rank as the sixth largest
economy in the world, behind the US, China, India, Japan and Germany.
3. 3
ASEAN nations area of land and the population are larger than European union
comprising of 15 nations. The outstanding feature of the economic growth strategy
of ASEAN is FDI ie Foreign Direct Investment. Foreign trade is in the life blood
of ASEAN. The economic prosperity and the economic integration of ASEAN
depend upon two important factors viz controlling inflation and sustained high
growth rate. As regards natural resources ASEAN is a treasure island. The aim of
ASEAN is to become a Free Trade Area by reducing tariffs among the ASEAN.
Inspite of tremendous political, economic and cultural diversity the ASEAN
countries are becoming integrated.
4. 4
HISTORY
ASEAN was existing before by an organisation called the Association of Southeast
Asia (ASA), a group consisting of the Philippines, Malaysia and Thailand that was
formed in 1961. The bloc itself, however, was inaugurated on 8 August 1967,
when foreign ministers of five countries – Indonesia, Malaysia, the Philippines,
Singapore, and Thailand – met at the Thai Department of Foreign Affairs building
in Bangkok and signed the ASEAN Declaration, more commonly known as the
Bangkok Declaration. The five foreign ministers – Adam Malik of Indonesia,
Narciso Ramos of the Philippines, Abdul Razak of Malaysia, S. Rajaratnam of
Singapore, and Thanat Khoman of Thailand – are considered the organisation's
Founding Fathers.
The motivations for the birth of ASEAN were so that its members’ governing elite
could concentrate on nation building, the common fear of communism, reduced
faith in or mistrust of external powers in the 1960s, and a desire for economic
development.
The block grew when Brunei Darussalam became the sixth member on 8 January
1984, barely a week after gaining independence on 1 January.
On 28 July 1995, Vietnam became the seventh member. Laos and Myanmar
(Burma) joined two years later on 23 July 1997. Cambodia was to have joined
together with Laos and Burma, but was deferred due to the country's internal
political struggle. The country later joined on 30 April 1999, following the
stabilisation of its government.
5. 5
During the 1990s, the bloc experienced an increase in both membership and drive
for further integration. In 1990, Malaysia proposed the creation of an East Asia
Economic Caucus[17] comprising the then members of ASEAN as well as the
People's Republic of China, Japan, and South Korea, with the intention of
counterbalancing the growing influence of the United States in the Asia-Pacific
Economic Cooperation (APEC) and in the Asian region as a whole.[18][19] This
proposal failed, however, because of heavy opposition from the United States and
Japan. Despite this failure, member states continued to work for further integration
and ASEAN Plus Three was created in 1997.
In 1992, the Common Effective Preferential Tariff (CEPT) scheme was signed as a
schedule for phasing tariffs and as a goal to increase the region’s competitive
advantage as a production base geared for the world market. This law would act as
the framework for the ASEAN Free Trade Area. After the East Asian Financial
Crisis of 1997, a revival of the Malaysian proposal was established in Chiang Mai,
known as the Chiang Mai Initiative, which calls for better integration between the
economies of ASEAN as well as the ASEAN Plus Three countries (China, Japan,
and South Korea).
Aside from improving each member state's economies, the bloc also focused on
peace and stability in the region. On 15 December 1995, the Southeast Asian
Nuclear-Weapon-Free Zone Treaty was signed with the intention of turning
Southeast Asia into a Nuclear-Weapon-Free Zone. The treaty took effect on 28
March 1997 after all but one of the member states have ratified it. It became fully
effective on 21 June 2001, after the Philippines ratified it, effectively banning all
nuclear weapons in the region.
6. 6
East Timor submitted a letter of application to be the eleventh member of ASEAN
at the summit in Jakarta in March 2011. Indonesia has shown a warm welcome to
East Timor.
Papua New Guinea was accorded Observer status in 1976 and Special Observer
status in 1981. Papua New Guinea is a Melanesian state. ASEAN embarked on a
programme of economic cooperation following the Bali Summit of 1976. This
floundered in the mid-1980s and was only revived around 1991 due to a Thai
proposal for a regional free trade area.
7. 7
AIMS AND PURPOSES
The ASEAN Declaration states that the aims and purposes of the Association are:
To accelerate the economic growth, social progress and cultural
development in the region through joint endeavors in the spirit of equality
and partnership in order to strengthen the foundation for a prosperous and
peaceful community of Southeast Asian nations.
To promote regional peace and stability through abiding respect for justice
and the rule of law in the relationship among countries in the region and
adherence to the principles of the United Nations Charter.
To promote active collaboration and mutual assistance on matters of
common interest in the economic, social, cultural, technical, scientific and
administrative fields.
To provide assistance to each other in the form of training and research
facilities in the educational, professional, technical and administrative
spheres.
To collaborate more effectively for the greater utilization of the agriculture
and industries, the expansion of their trade, including the study of problems
of international commodity trade , the improvement of their transportation
and communications facilities and the raising the living standards of their
peoples.
To promote south east asian studies.
To maintain close and beneficial cooperation with existing international and
regional organizations with similar aims and purposes and explore all
avenues for even closer cooperation among themselves.
8. 8
FUNDAMENTAL PRINCIPLES
The Treaty of Amity and Cooperation (TAC) in Southeast Asia, signed at the First
ASEAN Summit on 24 February 1976, declared that in their relations with one
another, the High Contracting Parties should be guided by the following
fundamental principles:
Mutual respect for the independence, sovereignty, equality, territorial
integrity, and national identity of all nations.
The right of every State to lead its national existence free from external
interference, subversion, or coercion.
Non-interference in the internal affairs of one another.
Settlement of differences or disputes by peaceful manner.
Renunciation of the threat or use of force.
Effective cooperation among themselves.
9. 9
ASEAN EMBLEM
1. The ASEAN Emblem shall be the official emblem of ASEAN.
2. The ASEAN Emblem represents a stable, peaceful, united and dynamic
ASEAN. The colours of the Emblem -- blue, red, white and yellow --
represent the main colours of the state crests of all the ASEAN Member
States.
3. The blue represents peace and stability. Red depicts courage and dynamism,
white shows purity and yellow symbolises prosperity.
4. The stalks of padi in the centre of the Emblem represent the dream of
ASEAN's Founding Fathers for an ASEAN comprising all the countries in
Southeast Asia, bound together in friendship and solidarity.
5. The circle represents the unity of ASEAN.
10. 10
STRUCTURE OF ASEAN
There are a number of decision-making bodies that comprise ASEAN, spanning
from international to the very local. The most important are listed below:
Meeting of the ASEAN Heads of State and Government: The highest body
made up of the heads of each respective government; meets annually.
Ministerial Meetings: Coordinates activities in many areas including agriculture
and forestry, trade, energy, transportation, science and technology, among others;
meets annually.
Committees for External Relations: Made up of diplomats in many of the
world's major capitals.
Secretary-General: The appointed leader of the organization empowered to
implement policies and activities; appointed to five year term. Currently Surin
Pitsuwan of Thailand.
Not mentioned above are over 25 other committees and 120 technical and advisory
groups.
11. 11
ENVIRONMENT
At the turn of the 21st century, issues shifted to include a regional approach to the
environment. The organisation started to discuss environmental agreements. These
included the signing of the ASEAN Agreement on Transboundary Haze Pollution
in 2002 as an attempt to control haze pollution in Southeast Asia. Unfortunately,
this was unsuccessful due to the outbreaks of the 2005 Malaysian haze and the
2006 Southeast Asian haze. Other environmental treaties introduced by the
organisation include the Cebu Declaration on East Asian Energy Security, the
ASEAN Wildlife Enforcement Network in 2005, and the Asia-Pacific Partnership
on Clean Development and Climate, both of which are responses to the potential
effects of climate change. Climate change is of current interest.
Through the Bali Concord II in 2003, ASEAN has subscribed to the notion of
democratic peace, which means all member countries believe democratic processes
will promote regional peace and stability. Also, the non-democratic members all
agreed that it was something all member states should aspire to.
12. 12
ASEAN PLUS THREE
Leaders of each country felt the need to further integrate the region. Beginning in
1997, the bloc began creating organisations within its framework with the intention
of achieving this goal. ASEAN Plus Three was the first of these and was created to
improve existing ties with the People's Republic of China, Japan, and South Korea.
This was followed by the even larger East Asia Summit, which now includes these
countries as well as India, Australia, New Zealand, United States and Russia. This
new grouping acted as a prerequisite for the planned East Asia Community, which
was supposedly patterned after the now-defunct European Community. The
ASEAN Eminent Persons Group was created to study the possible successes and
failures of this policy as well as the possibility of drafting an ASEAN Charter.
In 2006, ASEAN was given observer status at the United Nations General
Assembly.[31] As a response, the organisation awarded the status of "dialogue
partner" to the United Nations.
13. 13
FREE TRADE
2007 was the fortieth anniversary of ASEAN's beginning, and 30 years of
diplomatic relations with the US. On 26 August 2007, ASEAN stated that it aims
to complete all its free trade agreements with China, Japan, South Korea, India,
Australia and New Zealand by 2013, in line with the start of the ASEAN Economic
Community by 2015. In November 2007 the ASEAN members signed the ASEAN
Charter, a constitution governing relations among the ASEAN members and
establishing ASEAN itself as an international legal entity. During the same year,
the Cebu Declaration on East Asian Energy Security was signed in Cebu on 15
January 2007, by ASEAN and the other members of the EAS (Australia, People's
Republic of China, India, Japan, New Zealand, South Korea), which is in favour of
energy security by finding energy alternatives to conventional fuels.
On 27 February 2009 a Free Trade Agreement with the ASEAN regional block of
10 countries and Australia and its close partner New Zealand was signed, it is
believed that this FTA would boost combine GDP across the 12 countries by more
than US$48 billion over the period 2000–2020. ASEAN members together with
the group’s six major trading partners – Australia, China, India, Japan, New
Zealand and South Korea – have began the first round of negotiations on 26–28
February 2013 in Bali, Indonesia, on establishment of the Regional Comprehensive
Economic Partnership.
14. 14
THE ASEAN WAY
Since the post-independencephases of Southeast Asian states, efforts were made to
implement regional foreign policies, but with a unifying focus to refrain from
interference in domestic affairs of member states.
There was a move to unify the region under what was called the ‘ASEAN Way’
based on the ideals of non-interference, informality, minimal institutionalisation,
consultation and consensus, non-use of force and non-confrontation. ASEAN
members (especially Singapore) approved of the term ‘ASEAN Way’ to describe a
regional method of multilateralism.
Thus the signing of the Treaty of Amity and Cooperation in Southeast Asia
adopted fundamental principles:
Mutual respect for the independence, sovereignty, equality, territorial
integrity, and national identity of all nations
The right of every State to lead its national existence free from external
interference, subversion or coercion
Non-interference in internal affairs
Settlement of differences or disputes in a peaceful manner
Renunciation of the threat or use of force
Effective regional cooperation
15. 15
The ‘ASEAN way’ is said to contribute durability and longevity within the
organisation, by promoting regional identity and enhancing a spirit of mutual
confidence and cooperation. ASEAN agreements are negotiated in a close,
interpersonal process. The process of consultations and consensus is designed to
engender a democratic approach to decision making. These leaders are wary of any
effort to legitimise efforts to undermine their nation or contain regional
cooperation.
16. 16
ASEAN CHARTER
The ASEAN Charter serves as a firm foundation in achieving the ASEAN
Community by providing legal status and institutional framework for ASEAN. It
also codifies ASEAN norms, rules and values; sets clear targets for ASEAN and
presents accountability and compliance.
The ASEAN Charter entered into force on 15 December 2008. A gathering of the
ASEAN Foreign Ministers was held at the ASEAN Secretariat in Jakarta to mark
this very historic occasion for ASEAN.
With the entry into force of the ASEAN Charter, ASEAN will henceforth operate
under a new legal framework and establish a number of new organs to boost its
community-building process.
In effect, the ASEAN Charter has become a legally binding agreement among the
10 ASEAN Member States. It will also be registered with the Secretariat of the
United Nations, pursuant to Article 102, Paragraph 1 of the Charter of the United
Nations.
17. 17
The importance of the ASEAN Charter can be seen in the following contexts:
New political commitment at the top level
New and enhanced commitments
New legal framework, legal personality
New ASEAN bodies
Two new openly-recruited DSGs
More ASEAN meetings
More roles of ASEAN Foreign Ministers
New and enhanced role of the Secretary-General of ASEAN
Other new initiatives and changes
18. 18
MEETINGS
ASEAN SUMMITS
The organisation holds meetings, known as the ASEAN Summit, where heads of
government of each member meet to discuss and resolve regional issues, as well as
to conduct other meetings with other countries outside of the bloc with the
intention of promoting external relations.
The ASEAN Leaders' Formal Summit was first held in Bali, Indonesia in 1976. Its
third meeting was held in Manila in 1987 and during this meeting, it was decided
that the leaders would meet every five years. Consequently, the fourth meeting was
held in Singapore in 1992 where the leaders again agreed to meet more frequently,
deciding to hold the summit every three years. In 2001, it was decided to meet
annually to address urgent issues affecting the region. Member nations were
assigned to be the summit host in alphabetical order except in the case of Burma
which dropped its 2006 hosting rights in 2004 due to pressure from the United
States and the European Union.
By December 2008, the ASEAN Charter came into force and with it, the ASEAN
Summit will be held twice in a year.
19. 19
The formal summit meets for three days. The usual itinerary is as follows:
Leaders of member states would hold an internal organisation meeting.
Leaders of member states would hold a conference together with foreign
ministers of the ASEAN Regional Forum.
A meeting, known as ASEAN Plus Three, is set for leaders of three
Dialogue Partners (People's Republic of China, Japan, South Korea)
A separate meeting, known as ASEAN-CER, is set for another set of leaders
of two Dialogue Partners (Australia, New Zealand).
20. 20
MEETINGS
ASEAN Formal Summits
No Date Country Host Host leader
1st 23–24 February
1976
Indonesia Bali Soeharto
2nd 4–5 August 1977 Malaysia Kuala Lumpur Hussein Onn
3rd 14–15 December
1987
Philippines Manila Corazon Aquino
4th 27‒29 January 1992 Singapore Singapore Goh Chok Tong
5th 14‒15 December
1995
Thailand Bangkok Banharn Silpa-archa
6th 15‒16 December
1998
Vietnam Hanoi Phan Văn Khải
7th 5‒6 November 2001 Brunei Bandar Seri
Begawan
Hassanal Bolkiah
8th 4‒5 November 2002 Cambodia Phnom Penh Hun Sen
9th 7‒8 October 2003 Indonesia Bali Megawati
Soekarnoputri
10th 29‒30 November
2004
Laos Vientiane Bounnhang Vorachith
11th 12‒14 December
2005
Malaysia Kuala Lumpur Abdullah Ahmad
Badawi
12th 11‒14 January
20071
Philippines2 Cebu Gloria Macapagal-
Arroyo
13th 18‒22 November
2007
Singapore Singapore Lee Hsien Loong
14th3 27 February – 1
March 2009
10–11 April 2009
Thailand Cha Am, Hua
Hin
Pattaya
Abhisit Vejjajiva
21. 21
15th 23 October 2009 Thailand Cha Am, Hua
Hin
16th3 8–9 April 2010 Vietnam Hanoi Nguyễn Tấn Dũng
17th 28–31 October 2010 Vietnam Hanoi
18th4 7–8 May 2011 Indonesia Jakarta Susilo Bambang
Yudhoyono19th4 14–19 November
2011
Indonesia Bali
20th 3–4 April 2012 Cambodia Phnom Penh Hun Sen
21st 17–20 November
2012
Cambodia Phnom Penh
22nd 24–25 April 2013 Brunei Bandar Seri
Begawan
Hassanal Bolkiah
23rd 9–10 October 2013 Brunei Bandar Seri
Begawan
24th 10–11 May 2014 Burma Nay Pyi Taw Thein Sein
25th 10–12 November
2014
Burma Nay Pyi Taw
1 Postponed from 10‒14 December 2006 due to Typhoon Utor.
2 hosted the summit because Burma backed out due to enormous pressure from US and EU
3 This summit consisted of two parts.
The first part was moved from 12‒17 December 2008 due to the 2008 Thai political crisis.
The second part was aborted on 11 April due to protesters entering the summit venue.
4 Indonesia hosted twice in a row by swapping years with Brunei, as it will play host to
APEC (and the possibility of hosting the G20 summit which ultimately fell to Russia) in 2013.
22. 22
FREE TRADE AGREEMENT (FTA)
During the fourh ASEAN summit in 1992 in singapore, ASEAN Free Trade Area
was launched. It will come into full force in 2015. The ASEAN nations are
expected to benefit from the FTA as it will reduce tariff and non tariff barriers. The
members countries plan to streamline the custom procedures between them. Some
of the benefits that will accrue to member countries when FTA comes into force
are:
There will be free movement of goods, services and investments within
ASEAN by creating a single regional market like the European union.
It will also provide free access to the marketers of one member country to
the markets of all other member countries thus fostering growth in the
region.
FTA will improve business competitiveness between businesses from
different countries and also narrow developmental gaps, between member
countries.
In this regard, the ASEAN secretary-general pointed out in August 2007 that all
the free trade agreements among ASEAN members and the rest of their trading
partners would be completed and the FTA would be in place by 2013,ahead of
forming the ASEAN economic community in 2015. He further said that the
ASEAN had already started exchanging views with the European union on the
FTA accord but had not set any time schedule. There has been significant increase
in the value of goods after FTA was launched in 1992 and in ASEAN’s share of
global trade.
23. 23
EXTERNAL RELATIONS
The ASEAN Vision 2020 affirmed an outward-looking ASEAN playing a pivotal
role in the international community and advancing ASEAN’s common interests.
ASEAN has made major strides in building cooperative ties with states in the Asia-
Pacific region and shall continue to accord them a high priority. Cooperation with
other East Asian countries has accelerated with the holding of an annual dialogue
among the leaders of ASEAN, China, Japan, and the Republic of Korea. In 1997,
a joint statement between ASEAN and each of them was signed providing for
framework for cooperation towards the 21st century. In November 1999, the
leaders of ASEAN, China, Japan and the Republic of Korea issued a Joint
Statement on East Asia Cooperation outlining the areas of cooperation among
them.
The ASEAN Summit of 1992 mandated that “ASEAN, as part of an increasingly
interdependent world, should intensify cooperative relationships with its Dialogue
Partners.” Consultations between ASEAN and its Dialogue Partners are held at the
Foreign Ministers’ level on an annual basis. ASEAN’s Dialogue Partners include
Australia, Canada, China, the European Union, India, Japan, the Republic of
Korea, New Zealand, the Russian Federation, the United States of America, and
the United Nations Development Programme. ASEAN also promotes cooperation
with Pakistan on certain sectors.
24. 24
Consistent with its resolve to enhance cooperation with other developing regions,
ASEAN maintains contact with other inter-governmental organizations, namely,
the Economic Cooperation Organization, the Gulf Cooperation Council, the Rio
Group, the South Asian Association for Regional Cooperation, and the South
Pacific Forum.
Most ASEAN Member Countries also participate actively in the activities of the
Asia-Pacific Economic Cooperation (APEC), the Asia-Europe Meeting (ASEM),
the East Asia-Latin America Forum (EALAF).
25. 25
ASEAN CO-OPERATION
POLITICAL COOPERATION
The TAC stated that ASEAN political and security dialogue and cooperation
should aim to promote regional peace and stability by enhancing regional
resilience. Regional resilience shall be achieved by cooperating in all fields based
on the principles of self-confidence, self-reliance, mutual respect, cooperation, and
solidarity, which shall constitute the foundation for a strong and viable community
of nations in Southeast Asia.
Some of the major political accords of ASEAN are as follows:
ASEAN Declaration, Bangkok, 8 August 1967.
Zone of Peace, Freedom and Neutrality Declaration, Kuala Lumpur, 27
November 1971.
Declaration of ASEAN Concord, Bali, 24 February 1976.
Treaty of Amity and Cooperation in Southeast Asia, Bali, 24 February 1976.
ASEAN Declaration on the South China Sea, Manila, 22 July 1992.
Treaty on the Southeast Asia Nuclear-Weapon-Free Zone, Bangkok, 15
December 1997.
ASEAN Vision 2020, Kuala Lumpur, 15 December 1997.
Declaration on Joint Action to Counter Terrorism, 5 November 2001.
26. 26
ECONOMIC COOPERATION
Starting with a degree of cooperation which was initially limited to only a few
economic activities in the 1960s, ASEAN economic cooperation has not only
deepened but also widened in the last five years. This is evidence of the ASEAN
Member Countries' strong commitment to making the region a strong and dynamic
economic force.
Economic cooperation in ASEAN does not entail only trade liberalisation
measures but also trade facilitation, non-border measures and investment
promotion activities. New areas of cooperation, such as in services and intellectual
property rights are being implemented. Bold decisions have also been made to
elevate and strengthen ASEAN industrial cooperation through a new scheme
which will take into account present industrial needs and economic situation in
ASEAN. Cooperation in private sector development, small- and medium-size
enterprises, infrastructural development and regional investment promotion
measures have also made considerable progress.
The thrusts of ASEAN economic cooperation in the 1990s include the following:
To fully implement the ASEAN Free Trade Area (AFTA).
To develop the region into a global base for the manufacture of value added
and technologically sophisticated products geared towards servicing the
region and world markets.
To enhance the industrial efficiency of the region through exploiting
complementary location advantages based on the principles of market
sharing and resource pooling.
27. 27
To enhance the attractiveness of the region for investment and as a tourist
destination.
To cooperate in enhancing greater infrastructural development which will
contribute towards more efficient business environment.
To ensure that the rich resources (minerals, energy, forestry and others) of
the region are exploited effectively and efficiently.
28. 28
COOPERATION IN INDUSTRIAL DEVELOPMENT
Industrial Cooperation has been an important cornerstone of ASEAN economic
cooperation. Various industrial cooperation initiatives have been pursued with the
aim of enhancing the industrial competitiveness of the region. Industrial
cooperation schemes based on the principles of resource pooling and market
sharing have been introduced to facilitate effective exploitation of economies of
scale and the region's complementary location advantages. The Schemes are:
1. The ASEAN Industrial Projects (AIP) introduced in 1976. The aim of AIP is
to establish large-scale regional industrial projects that will meet the basic
needs of the region and ensure more efficient use of the region's resources.
The AIP resulted in the establishment of the ASEAN-Acheh Fertilizer and
ASEAN-Bintulu Fertilizer Plants.
2. The ASEAN Industrial Complementation (AIC) Scheme was established in
1981) and the Brand-to-Brand Complementation (BBC) Scheme was set up
in 1988. Both the schemes were aimed at the automotive sector and was
designed to promote industrial complementation between companies
operating in the region. The BBC Scheme, an offshoot of the AIC, is
concerned with the production and exchange of automotive parts and
components to facilitate horizontal specialization in the production of these
products in the region. The Schemes encourage automotive brand owners to
exploit economies of scale of production through rationalization and
specialization of automotive production units by allowing exchange of
approved automotive parts and components for specific automotive brand
model. These automotive parts and components were granted 50% MOP of
the prevailing MFN rate by the participating importing countries as well as
local content accreditation.
29. 29
3. The ASEAN Industrial Joint Venture (AIJV) Scheme was introduced in
1983 and revised in 1987. The aim was to encourage greater investment into
and within the region, and to increase industrial production through resource
pooling and market sharing activities. AIJV products were granted 90%
MOP of the prevailing MFN rate and local content accreditation where
applicable of the participating importing country.
4. Given the rapid industrial development of the region, the ASEAN Member
Countries in 1995 agreed that the existing BBC and AIJV Schemes be
phased out and be replaced by a new industrial cooperative scheme taking
into account the gradual tariff liberalization of the CEPT Scheme. The Basic
Agreement on the ASEAN Industrial Cooperation (AICO) Scheme was
signed on 27 April 1997 and became operational on 1 November of the same
year. The AICO Scheme aimed at promoting joint manufacturing activities
of companies operating in ASEAN. Products under the AICO Scheme will
be granted 0-5% preferential tariff rate which in effect is equivalent to the
final CEPT rate and local content accreditation where applicable. The AICO
Scheme was developed with the active participation and cooperation of the
private sector.
30. 30
COOPERATION IN FINANCE AND BANKING
ASEAN finance cooperation has been further strengthened with the various
decisions made at the First ASEAN Finance Ministers Meeting (AFMM) held on 1
March 1997 in Phuket, Thailand. The decision to strengthen cooperation in the
field of finance will provide strong support to the various regional initiatives and
schemes expounded by the ASEAN Leaders. This includes, among others, the
ASEAN Free Trade Area (AFTA), ASEAN Industrial Cooperation Scheme
(AICO) and ASEAN Investment Area (AIA).
Two important documents were signed by the ASEAN Finance Ministers in
Phuket. These were the Ministerial Understanding (MU) on Finance Cooperation
and the ASEAN Agreement on Customs. The former lays down the foundation for
strengthening cooperation in finance. In particular, the MU provides a framework
for enhancing cooperation in several areas of finance which include banking;
financial and capital markets development; customs matters; insurance matters;
taxation and public finance matters; monetary policy cooperation; and human
resource development in the area of finance.
The signing of the Customs Agreement will enhance ASEAN cooperation in
customs activities and will help expedite the early realisation of AFTA as it
contains provisions that would facilitate greater intra-regional trade and investment
flow. The Agreement also stipulates joint efforts in anti-smuggling and customs
control activities, mutual technical assistance, customs modernisation, and upgrade
customs skills to meet present and future challenges.
31. 31
In view of increasing level of finance activities and cooperation, the ASEAN
Finance Ministers (AFM) has established the ASEAN Senior Finance Officials
Meeting (ASFOM) to assist the AFM in their work. The ASFOM and its working
group will meet regularly to develop, manage and implement regional finance
cooperation activities. Other finance-related bodies such as the insurance
regulators, capital markets, tax and central bank authorities have been encouraged
to establish appropriate forum for initiating activities and strengthening
cooperation endeavors in each of the finance sub-sectors.
32. 32
COOPERATION IN SERVICES
ASEAN Member Countries have agreed to enhance cooperation in this new area of
economic cooperation and to liberalize trade in services. The ASEAN Framework
Agreement on Services was signed during the Fifth ASEAN Summit in December
1995 in Bangkok. At the Summit, it was agreed that a process of negotiations shall
commence beginning 1 January 1996 and ending 31 December 1998. The
negotiations will aim to produce commitments on increased market access and
national treatment from Member Countries in the seven priority service sectors -
air transport, business services, construction, financial services, maritime transport,
telecommunications and tourism. A Coordinating Committee on Services (CCS)
has already been established with seven working groups under it. Member
Countries have exchanged information on their General Agreement on Trade in
Services (GATS) commitments and service regime. An initial package of offers is
scheduled to be finalized before October 1997 for implementation no later than 31
March 1998.
33. 33
COOPERATION IN MINERALS
The Programme of Action for cooperation in minerals was approved by the Fifth
ASEAN Summit to promote trade and investment in industrial minerals. Member
Countries have pursued initiatives to exchange information on policy, regulations
and legislation to attract investments. To further strengthen ASEAN of cooperation
in the sector, Member Countries agreed to establish an ASEAN Industrial Minerals
Information System (AIMIS) and a Directory of Research and Development and
Training Centre available in the region.
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INDIA AND ASEAN
The ASEAN–India Free Trade Area emerged from a mutual interest of both parties
to expand their economic ties in the Asia-Pacific region. India's Look East policy
was reciprocated by similar interests of many ASEAN countries to expand their
interactions westward.
After India became a sectoral dialogue partner of ASEAN in 1992, India saw its
trade with ASEAN increase relative to its trade with the rest of the world. Between
1993 and 2003, ASEAN-India bilateral trade grew at an annual rate of 11.2%, from
US$ 2.9 billion in 1993 to US$ 12.1 billion in 2003. Much of India's trade with
ASEAN is directed towards Singapore, Malaysia, and Thailand, with whom India
holds strong economic relations.
In 2008, the total volume of ASEAN-India trade was US$ 47.5 billion. ASEAN’s
export to India was US$ 30.1 billion – a growth of 21.1 per cent in comparison
with that of 2007. ASEAN’s imports from India were US$ 17.4 billion – a growth
of 40.2 per cent in comparison to that of 2006. As for foreign direct investment
(FDI), the inflow from India to ASEAN Member States was US$476.8 million in
2008, accounting for 0.8 per cent of total FDI in the region. Total Indian FDI into
ASEAN from 2000 to 2008 was US$ 1.3 billion.
Acknowledging this trend and recognising the economic potential of closer
linkages, both sides recognised the opportunities for deepening trade and
investment ties, and agreed to negotiate a framework agreement to pave the way
for the establishment of an ASEAN–India Free Trade Area (FTA).
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CONCLUSION
The world economy has grown up fast and many economic systems have been
established under the regional cooperation. The economy integration of ASEAN
and Asia countries has been brought a new and giant influence. The regional
economic corporation has already become a tendency.
ASEAN clearly does matter in both domestic and regional governance, although
the organisation has had mixed success in addressing critical domestic and
regional problems. Because ASEAN privileges the ASEAN Way principles and
practices, the organisation is not always able to ensure effective cooperation in
areas requiring domestic policy adjustment towards a common position. The
ASEAN approach ensures that regional cooperation does not undermine the dom-
estic policy autonomy of member states. Thus, regional governance has not had a
homogenising effect on its members although goals and standards have been out-
lined at the regional level to which members are encouraged to work towards. As a
result, the region’s pluralism has been maintained.