Chapter-1 Intoduction The Association of Southeast Asian Nations is a geo-political and economic

organization of ten countries located in Southeast Asia, which was formed on 8 August 1967 by Indonesia, Malaysia, the Philippines, Singapore and Thailand. Since then, membership has expanded to include Brunei, Burma (Myanmar), Cambodia, Laos, and Vietnam. Its aims include accelerating economic growth, social progress, and cultural development among its members, protection of regional peace and stability and opportunities for member countries to discuss differences peacefully. ASEAN covers a land area of 4.46 million km, 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 2010, its combined nominal GDP had grown to US$1.8 trillion. If ASEAN were a single entity, it would rank as the tenth largest economy in the world behind the United the United

States, China, Japan, India, Germany, Russia, France, Canada, Spain, Brazil, Kingdom, and Italy.

On 8 August 1967, five leaders - the Foreign Ministers of Indonesia, Malaysia, the Philippines, Singapore and Thailand - sat down together in the main hall of the Department of Foreign Affairs building in Bangkok, Thailand and signed a document.By virtue of that document, the Association of Southeast Asian Nations (ASEAN) was born.It declared the establishment of an Association for Regional Cooperation among the Countries of Southeast Asia to be known as the Association of Southeast Asian Nations (ASEAN).

Formation ASEAN was preceded by an organization called the Association of Southeast Asia, commonly called ASA, an alliance consisting of the Philippines, Malaysia and Thailand that was formed in 1961. The bloc itself, however, was established on 8 August 1967, whenf oreign 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
1

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 organization'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; not to mention Indonesias ambition to become a regional hegemon through regional cooperation and the hope on the part of Malaysia and Singapore to constrain Indonesia and bring it into a more cooperative framework. 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 program 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. The bloc grew when Brunei Darussalam became the sixth member on 8 January 1984, barely a week after gaining independence on 1 January.

Expansion 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 stabilization of its government. 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 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. 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 regions 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-WeaponFree 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. 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 Goals of ASEAN To accelerate the economic growth, social progress and cultural development in the region through joint endeavors; and To promote regional peace and stability through abiding respect for justice and the rule of law. Objectives of ASEAN Feb. 1967 - Treaty of Amity and Cooperation (TAC) : Mutual respect for the independence, sovereignty, equality, territorial integrity, and national identity of all nations The rights of every state to lead its national existence free from external interference, subversion, and coercion Non-interference in the internal affairs of one another Settlement of differences or disputes by peaceful manner
3

 Renunciation of the threat or use of force; and Effective cooperation among themselves. ASEAN Vision 2020 A concert of Southeast Asian nations, outward looking, living in peace, stability and prosperity, bonded together in partnership in dynamic development and in a community of caring societies.

ASEAN member countries 1. Indonesia 2. Malaysia 3. The Philippines 4. Singapore 5. Thailand 6. Brunei 7. Burma (Myanmar) 8. Cambodia
4

9. Laos 10. Vietnam

ASEAN countries at a glance

Why is ASEAN in the Driving Seat of the Greater East Asia?

Economic Integration of ASEAN

6

Asean Summit The ASEAN Summit is an annual meeting held by the member of the Association of Southeast Asian Nations in relation to economic, and cultural development of Southeast Asian countries. The league of ASEAN is currently connected with other countries who aimed to participate on the missions and visions of the league. Apparently, the league is conducting an annual meetings with other countries in an organization collectively known as the ASEAN dialogue partners. ASEAN +3 adds China, Japan and South Korea. The formal summit are held in three days. The usual itinerary are as follows: ASEAN leaders hold an internal organization meeting. ASEAN leaders hold a conference together with foreign ministers of the ASEAN Regional Forum. Leaders of 3 ASEAN Dialogue Partners (also known as ASEAN+3) namely China, Japan and South Korea hold a meeting with the ASEAN leaders. And a separate meeting is set for leaders of 2 ASEAN Dialogue Partners (also known as ASEAN+CER) namely Australia and New Zealand. The First ASEAN summit was held in February 1976 in Bali.[3] At this summit, ASEAN expressed its readiness to "develop fruitful relations" and mutually beneficial co-operation with other countries of the region.[4] The ASEAN leaders signed the Treaty of Amity and Cooperation in Southeast Asia. On 2nd tushar the great summit held on Kuala Lumpur, Malaysia in 1977 was the occasion for the first summit meeting between Japanand ASEAN. Japan expressed its intention to promote co-operation with ASEAN.[5] On 9th ASEAN Summit; A meeting on October 7, 2003 on Bali, Indonesia. The leaders of the members nations signed a declaration known as the Bali Concord II in which they agreed to pursue closer economic integration by 2020.

According to the declaration, "an ASEAN Community" would be set upon three pillars, "namely political and security cooperation, economic cooperation, and socio-cultural cooperation; For the purpose of ensuring durable peace, stability and shared prosperity in the region." The plan envisaged a region with a population of 500 million and annual trade of US$720 billion. Also, a free trade area would be established in the region by 2020. ASEAN's leaders also discussed setting up a security community alongside the economic one, though without any formal military alliance. During the same meeting, the People's Republic of China and ASEAN have also agreed to work faster toward a mutual trade agreement, which will create the world's most populous market, with 1.7 billion consumers. Japan also signed an agreement pledging to reduce tariff and non-tariff barriers with ASEAN members. On the 11th ASEAN summit last December 1214, 2005 in Kuala Lumpur, Malaysia. Seven main issues were discussed during the Summit. The issues are: the spread of bird flu southern Thailand conflict democracy in Myanmar crude oil prices fluctuation and poverty investment and trade ASEAN Charter

Immediately after the summit ended, the inaugural East Asia Summit was held. The 12th ASEAN Summit was originally set to be hosted on Cebu island in the Philippines from December 10 to 14. However on December 8, organizers decided to move the summit schedule to January 1215, 2007 due to Typhoon Seniang. Cebu Metropolitan Area (composed of Cebu City, Mandaue City, Talisay City, and Lapu-Lapu City) jointly hosted varied events of the summit. The actual conference was held at the Cebu International Convention

Center in Mandaue City while the Shangri-La Mactan Island Resort & Spa inLapu-Lapu City provided accommodations for delegates and venues for smaller meetings. At the 12th ASEAN Summit, the member countries of ASEAN signed five agreements pertaining to continuing integration of ASEAN and enhancing political, economic and social cooperation in the region:[6] Cebu Declaration Towards a Caring and Sharing Community. Cebu Declaration on the Blueprint for the ASEAN Charter. Cebu Declaration on the Acceleration of the Establishment of an ASEAN Community by 2015. ASEAN Declaration on the Protection and Promotion of the Rights of Migrant Workers. ASEAN Convention on Counter Terrorism. The 13th ASEAN Summit was held from November 1822, 2007, in Singapore. The theme was "One ASEAN at the Heart of Dynamic Asia". The key theme of the discussions was set to be on "Energy, Environment, Climate Change and Sustainable Development". In line with the theme, the ASEAN Leaders' Declaration on Environmental Sustainability was signed at the 13th ASEAN Summit and a proposal to work on a Singapore Declaration on the Environment was issued at the 3rd East Asia Summit. The leaders had endorsed the ASEAN Economic Community Blueprint which will help chart concrete targets for establishing a single market and production base in the ASEAN region by 2015. The summit marking the 30th anniversary of ASEAN-EU ties was held on November 22. Other documents that had be negotiated and signed: ASEAN Mutual Recognition Agreement on Architectural Services. ASEAN Framework Arrangement for the Mutual Recognition of Surveying Qualifications.
10

Protocol to Implement the Sixth Package of Commitments under the ASEAN Framework Agreement on Services.

Agreements on trade and areas of cooperation with ASEAN Dialogue Partners. The 15th Asean Summit was held from October 2325, 2009 in Hua Hin, Cha Am,

Thailand.[7] It involved the Leaders from Asean league of Nations together with their dialogue partners from People's Republic of China, Japan, South Korea, India, Australia and New Zealand. A flurry of meetings among Asian leaders on the last day raised the possibility of forging a regional free trade pact, which is likely to be raised at the Asia Pacific Economic Cooperation (APEC) summit in November 2009. The 16th ASEAN Summit held in Ha Noi,Vietnam 9 April 2010 Towards the Asean Community: from Vision to Action". The 17th ASEAN Summit in October 2010 in Vietnam Ha Noi.Indonesian President Susilo Bambang Yudhoyono did not attend the opening ceremony of the Summit this afternoon. He had to cut short his trip and returned home to oversee the rescue operation in the disasterstricken area, after arriving here on Tuesday for a state visit prior to attending the Summit. The 18th ASEAN Summit in Jakarta capital of Indonesia.The 19th ASEAN Summit in Bali, Indonesia at Nov,2011. Chapter-2 ASEAN Statistics ASEAN Trade, 2010-2011 Country 2010 Exports Brunei Darussalam Cambodia
11

2011 1/ Imports Total trade Exports Imports Total trade

8,615.4

2,383.8

10,999.2

12,362.3

2,460.0

14,822.3

5,583.6 Indonesia 157,779.1 Lao PDR 2,432.8 Malaysia 198,800.8 Myanmar 7,599.5 The Philippines Singapore 371,194.3 Thailand 195,312.3 Viet Nam 72,191.9 ASEAN 51,431.7

4,896.8

10,480.3

6,710.6

6,133.6

12,844.1

135,663.3

293,442.4

203,496.7

177,435.6

380,932.3

2,076.4

4,509.1

1,746.5

2,209.4

3,955.9

164,733.5

363,534.3

228,179.1

187,542.8

415,721.9

4,198.7

11,798.3

8,119.2

6,805.9

14,925.1

58,228.6

109,660.3

48,042.2

63,709.4

111,751.6

328,078.9

699,273.3

409,443.5

365,709.1

775,152.6

189,728.4

385,040.8

228,820.7

230,083.6

458,904.4

84,801.2

156,993.1

95,365.6

104,216.5

199,582.1

1,070,941.4 974,789.6

2,045,731.0

1,242,286.4 1,146,305.9 2,388,592.3

Top ten ASEAN trade partner countries/regions, 2011 Trade country partner Value Exports Imports Total trade Share to total ASEAN trade Exports Imports Total trade ASEAN 327,531.8 China 127,908.5 Japan 152,497.1 280,405.5 10.3 13.3 11.7 270,710.4 598,242.2 26.4 23.6 25.0

12

145,197.7 EU-27 126,593.5 USA 106,305.6 Republic Korea Hong Kong 81,312.9 Taiwan 33,650.7 India 42,754.7 Australia 37,253.9 Total top ten trade partner countries Others/ 159,309.1 Total 1,242,286.4 1,082,977.3 of 54,468.0

128,149.4

273,347.1

11.7

11.2

11.4

108,182.6

234,776.2

10.2

9.4

9.8

92,480.3

198,785.9

8.6

8.1

8.3

70,002.9

124,470.9

4.4

6.1

5.2

15,402.1

96,714.9

6.5

1.3

4.0

47,214.9

80,865.6

2.7

4.1

3.4

25,674.1

68,428.8

3.4

2.2

2.9

22,220.5

59,474.4

3.0

1.9

2.5

932,534.2

2,015,511.5 87.2

81.4

84.4

213,771.7

373,080.7

12.8

18.6

15.6

1,146,305.9

2,388,592.3 100.0

100.0

100.0

Top ten export markets and import origins, 2011 Export market Country of destination/ Value exports ASEAN 327,531.8 Japan 145,197.7 China
13

Import origin of Share to Country of origin/ total ASEAN 26.4 China 11.7 Japan 152,497.1 13.3 270,710.4 23.6 Value Imports of Share total to

127,908.5 EU-27 126,593.5 USA 106,305.6 India 42,754.7 Australia 37,253.9 Taiwan 33,650.7 Total top ten destination countries Others2/ 159,309.1 Total

10.3 EU-27 10.2 USA 8.6 Saudi Arabia 3.4 United 3.0 Emirates India 2.7 Total top ten origin Arab

128,149.4

11.2

108,182.6

9.4

92,480.3

8.1

36,186.3

3.2

31,356.4

2.7

25,674.1

2.2

1,082,977.3 87.2

countries Others2/

962,454.3

84.0

12.8 Total

183,851.5

16.0

1,242,286.4 100.0

1,146,305.9

100.0

14

Chapter-3 Asean Relation with other countries ASEAN Free Trade Area (AFTA) Asean Free Trade Area (AFTA) is a trade bloc agreement by the Association of Southeast Asian Nations supporting local manufacturing in all ASEAN countries. The AFTA agreement was signed on 28 January 1992 in Singapore. When the AFTA agreement was originally signed, ASEAN had six members, namely, Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand. Vietnam joined in 1995, Laos and Myanmar in 1997 and Cambodia in 1999. AFTA now comprises the ten countries of ASEAN. All the four latecomers were required to sign the AFTA agreement in order to join ASEAN, but were given longer time frames in which to meet AFTA's tariff reduction obligations. The primary goals of AFTA seek to: Increase ASEAN's competitive edge as a production base in the world market through the elimination, within ASEAN, of tariffs and non-tariff barriers and Attract more foreign direct investment to ASEAN.

The primary mechanism for achieving such goals is the Common Effective Preferential Tariff scheme, which established a phased schedule in 1992 with the goal to increase the "regions competitive advantage as a production base geared for the world market". India-ASEAN Relation

15

ASEAN-India dialogue relations have grown rapidly from a sectoral dialogue partnership in 1992 to a full dialogue partnership in December 1995. The relationship was further elevated with the convening of the ASEAN-India Summit in 2002 in Phnom Penh, Cambodia. Progress made in the cooperation. In demonstrating its commitment and shared interest to ensuring peace, security, stability and development in Southeast Asia, India acceded to the Treaty of Amity and Cooperation in Southeast Asia (TAC) on 8 October 2003 during the 2nd ASEAN-India Summit in Bali, Indonesia. At the same occasion, ASEAN and India also signed a Joint Declaration for Cooperation in Combating International Terrorism, symbolizing concrete initiatives to step up cooperation in the fight against terrorism.ASEAN and India will mark the 20th anniversary of their dialogue relations in 2012 with a Commemorative Summit to be held in India. A number of commemorative activities have been planned and carried out to signify the expanding and deepening of the dialogue partnership. Politico-Strategic And Security Relationships At the ARF and at ASEAN-India Summit level meetings. The ARF discusses security issues through its ARF Senior Officers Meetings (ARF SOM) and Inter-sessional Support Group meetings on Confidence Building Measures (ISG on CBMs) And its track-II platforms the Council for Security Cooperation in the Asia Pacific (CSCAP) and ASEAN Institute of Strategic and International Studies (ASEAN-ISIS). Since 1996, India has been taking part in both the wings of the Forum on issues related mainly to transnational organized crimes such as: drug-trafficking terrorism and counter-terrorism maritime piracy
16

 Illegal movement of nuclear, chemical, biological, and other deadly materials. In the 2nd India-ASEAN summit level meeting in October 2003, India also signed the ASEAN Treaty of Amity and Cooperation(TAC), expressing its adherence to the ASEAN goal of regional peace and stability.

Economic Engagements And Trade Relationship Remained minimal during Cold War years, picked up only when India adopted Look East Policy (early 90s). During the last fifteen years, the total value of trade between India and ASEAN countries has gone up from US$2.4 billion in 1990 to US$23 billion by the end of 2005. Area of trade: palm oil, electrical and high-end technological components, chemical products and drugs, textiles, software, tea and coffee, both raw and processed meats automotive, chemicals, consumer electronics and retailing sectors and so on. Foreign Direct Investment constitutes another important area for economic cooperation between India and ASEAN. The total Indian FDI in the ASEAN region remained at a modest US$225 million and FDI from the ASEAN-6 countries in India at US$2 billion.

ASEAN FDI is mainly in the areas of construction (Malaysian companies) and software (Singapore). India-ASEAN economic cooperation is being managed and overseen through the following institutional arrangements at the official level. ASEAN-India Business Summit ASEAN-India Business Council

17

 ASEAN-India Economic Ministers Meetings ASEAN-India Trade Negotiation Committee ASEAN-India Working Group on Trade and Investment Indias Trade with ASEAN

25000 20000 15000 10000 5000 0 -5000 -10000 India's export india's import trade balance

In $mn

2002-03 4627.7 5160.3 -532.6

2003-04 5825.7 7438.2 -1612.5

2004-05 8422.4 9110.9 -688.5

2005-06 10409.8 10882.1 -472.3

2006-07 12605.2 18091.6 -5486.4

2007-08 15721.2 22669.7 -6948.5

Profile of Indias Trade with ASEAN ($ mn)

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Basic Indicators of India & ASEAN Countries

19

GDP Structure Percent Share

Source: Statistical outline of India 2004-05, TATA Economic Services & CIA Country Fact sheet

Scientific And Technological Relationship A number of agreements have been signed covering areas like space technology, infotech, biotechnology, pharmaceuticals, and tele-medicines. India and ASEAN have also decided to establish an India-ASEAN Institute of Biotechnology in Jakarta and develop an ASEAN-India Digital Archive. Cultural Relationship Buddhism practiced by a large number of people in mainland Southeast Asia Indian merchants and traders from Gujarat are known to have brought Islam to the Southeast Asian coasts during their trading visits. India and ASEAN have also been working on linking Indian higher educational institutions with the ASEAN University Network. organizing Indian Education Fairs in ASEAN countries by the government. Social Indicators

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* Cambodia ** Indonesia Source: Key Statistical indicators, Asian Development Bank 2004 Challenges And Opportunities The existing volume of trade between India and ASEAN has remained low. Indias share in ASEANs total global trade has remained only 1 per cent. Indias policy of sectoral capping of FDI- restricted the flow of ASEAN FDI

Indias bureaucratic entanglement But, the nature and dynamics reflect both the cementing and diversification of regional cooperation. Bilateral Agreements Signed Between India and Asean

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Development Cooperation ASEAN-India cooperation covers the economic, political and security, and development cooperation dimensions In terms of sectors, ASEAN-India cooperation covers the following: trade and investment, science and technology, human resources development, tourism, etc. India had contributed USD2.5 million in October 2002 to the ASEAN-India Cooperation Fund to further enhance cooperation. During the 5th ASEAN-India JCC, India proposed a new sector of co-operation agriculture- and would be submitting a concept paper to ASEAN on the modalities and areas to forge co-operation in the sector. Future Direction The vital commercial sea lanes between West Asia and South East Asia straddle the Indian mainland and its island territories.
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 A vast potential still remains untapped. Increase the level of cooperation. Programmed approach with clear strategic thrusts The ASEAN-India Framework Agreement on CEC, could facilitate greater flow of trade and investment, encourage their respective private sectors to tap on the huge market potentials. Combating international terrorism. Other means of cooperation frameworks as it would complement the larger goal of enhancing ASEAN-India ties. Conclusion Indias entry into ASEAN was engineered by the economic and strategic factors India dialogue relations had grown rapidly from a sectoral dialogue partnership in 1992 to a full dialogue partnership in December 1995. India has been an active participant of the ARF. Indias focus on a strengthened and multi-faceted relationship with ASEAN is an outcome of the significant changes in the worlds political and economic scenario since the early 1990s and Indias own march towards economic liberalization.

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Japan-ASEAN Relations Japan's formal relationship with ASEAN dates back to 1977, when then Prime Minister Takeo Fukuda met with ASEAN leaders at the organization's second summit meeting in Kuala Lumpur. Since that time, Japan and ASEAN have forged a robust partnership that has contributed significantly to the region's economic, social, and political development. Japan's Official Development Assistance (ODA) program has played a particularly important role in the region's economic dynamism and continues to be a pillar of support for ASEAN's newest members. The "New Partnership for Peace and Prosperity" announced by then Prime Minister Nobuo Takeshita and his ASEAN counterparts in 1987 recognized the growing significance of private sector cooperation in the region's growth. The 1997 Asian financial crisis highlighted the interdependence of the region's economies and led to the establishment of the ASEAN+3 (Japan, Korea, and China) Framework two years later. To assist ASEAN countries recover from the crisis, Japan created the JapanASEAN Solidarity Fund in 1999 and the Japan-ASEAN General Exchange Fund (JAGEF) in 2000. In 2001, the ASEAN-Japan Eminent Persons Group produced a vision for Japan-ASEAN Relations in the 21st Century that proposed expanding cooperation to include international issues such as UN reform and the WTO. In recent years, Japan and ASEAN have turned their attention to tackling transnational challenges affecting the region. During his first meeting with ASEAN counterparts in 2001, Prime Minister Junichiro Koizumi urged greater cooperation on global issues such as counterterrorism, anti-piracy, environmental protection, and preventing the spread of infectious diseases. At the December 2003 ASEAN-Japan Commemorative Summit in Tokyo, the two sides unveiled the Japan-ASEAN Plan of Action, a comprehensive framework to address future relations in the fields of economics and finance, politics and security, as well as exchanges and cultural cooperation. Among the specific initiatives contained in the Plan of Action was a commitment by Japan to contribute USD 1.5 billion for the Mekong Region Development project within three years. In 2004, Japan acceded to the Treaty of Amity and Cooperation in Southeast Asia (TAC), marking a milestone in Japan-ASEAN security relations. In the same year, Japan and ASEAN adopted the ASEAN-Japan Joint Declaration for Cooperation to
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Combat International Terrorism. In 2005, Prime Minister Koizumi pledged to provide USD 130 million for an initiative to combat infectious diseases, including the donation of 500,000 courses of Tamiflu. In March 2006, Foreign Minister Taro Aso participated in a signing ceremony to establish the Japan-ASEAN Integration Fund (JAIF). The fund, to which Japan has contributed USD 70 million, was established to enhance ASEAN's efforts to address urgent regional issues such as terrorism and avian influenza.

ASEAN Attitudes Singapore Prime Minister Lee Kuan Yew said in 1969: ``My generation and that of my elders cannot forget [WWII] as long as we live

``The policy of our government is not to allow the unhappy experiences of the past to inhibit us from a policy which can enhance our growth rates by Japanese participation Distrust remained but reduced Fears of Japans imperialist tendencies remained but reduced.

Japan-Asean Trade Stats Year Trade Value Import Export Balance Figures are in yen 2000 92,592,621 51,654,198 40,938,423 10,715,775 2010 128,164,584 67,399,627 60,764,957 6,634,670

25

26

27

China-ASEAN Relations The ASEANChina Free Trade Area (ACFTA), also known as ChinaASEAN Free Trade Area is a free trade area among the ten member states of the Association of Southeast Asian Nations (ASEAN) and the People's Republic of China. The initial framework agreement was signed on 4 November 2002 in Phnom Penh, Cambodia, with the intent on establishing a free trade area among the eleven nations by 2010. The free trade area came into effect on 1 January 2010. The ASEANChina Free Trade Area is the largest free trade area in terms of population and third largest in terms of nominal GDP. ASEAN members and the People's Republic of China had a combined nominal gross domestic product of approximately US$6 trillion in 2008. The free trade area had the third largest trade volume after the European Economic Area and the North American Free Trade Area. China first proposed the idea of a free trade area in November 2000. It had overtaken the United States as the third largest trading partner of ASEAN, after Japan and the European Union, when the free trade area came into effect. Between 2003 and 2008, trade with ASEAN grew from US$59.6 billion to US$192.5 billion. China is also the world's largest exporter. Total Trade with China 1998 Total Trade In % age of Total trade 20,414 3.5% 2010 232,013 11.3%

28

Total Trade
250,000 200,000 150,000 100,000 50,000 0 1998 2010 Total Trade

EU-ASEAN Relations The EU is negotiating Free Trade Agreements with Singapore, Malaysia and Vietnam. The EU's door remains open to start negotiations with other partners in the region and hopes one day to complete these agreements with a region-to-regional trade agreement. ASEAN as a whole represents the EU's 3rd largest trading partner outside Europe (after the US and China) with more than 206 billion of trade in goods and services in 2011. The EU is ASEAN 2nd largest trading partner after China, accounting for around 11% of ASEAN trade. The EU is by far the largest investor in ASEAN countries. EU companies have invested around 9.1 billion annually on average (2000-2009). The EU's main exports to ASEAN are chemical products, machinery and transport equipment. The main imports from ASEAN to the EU are machinery and transport equipment, agricultural products as well as textiles and clothing.

29

Trade in goods 2009-2011, billions

Year

EU imports

EU exports

Balance

2009

68.0

50.1

-17.9

2010

87.0

61.1

-25.8

2011

93.3

68.4

-24.8

Foreign direct investment 2010, billions Year 2010 Inward stocks 67.9 Outward stocks 192.7
30

Balance 124.9

USA-ASEAN Relations The United States and ASEAN members (Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, and Vietnam) concluded a TIFA in August 2006 and since then have been working to build upon already strong trade and investment ties to further enhance their economic relationship as well as promote ASEAN regional economic integration. The United States intensified its work under the TIFA in 2009, presenting ASEAN senior officials a number of ambitious proposals to be pursued under the TIFA work plan. New agreedupon work plan items include negotiating agreements on trade facilitation, as well as conducting dialogues on trade finance, trade and environment, and government-business. These new initiatives join the existing set of TIFA work plan items that include cooperation on standards and support for the ASEAN Single Window project. Ambassador Kirk hosted the ASEAN Trade Ministers in May, 2010 for the first U.S.ASEAN Road Show, with stops in Seattle and Washington, DC. The Road Show brought together Obama Administration officials, members of Congress and ASEAN trade ministers as

31

well as U.S. and ASEAN business representatives to identify business opportunities and to discuss ways to expand U.S.-ASEAN economic cooperation and support ASEAN integration. In addition, the United States and ASEAN facilitated the signing of a Memorandum of Understanding on trade finance between the Export-Import Bank of the United States and chambers of commerce and business federations from the Philippines, Vietnam, Singapore, Indonesia, and Malaysia. In March 2011, Assistant USTR Barbara Weisel participated in a Trade and Environment Forum with ASEAN Senior Economic Officials in Singapore that will serve as a foundation for continued discussion of trade and environmental issues under the TIFA. In 2010, USTR also requested the International Trade Commission (ITC) conduct a study on trends in regional integration, export competiveness, and inbound investment. The ITC study analyzes these issues in six industries: 1) computer components; 2) healthcare services, 3) cotton woven apparel, 4) hardwood plywood and flooring, 5) motor vehicle parts, and 6) palm oil. The ITCs final report (USITC Publication 4176) was released in August 2010 and is available here. U.S.-ASEAN Trade Facts With robust economies and a total population of about 600 million people, the ten member countries of the Association of South East Asian Nations represent large and growing markets for U.S. traders and investors. In 2010, as U.S. trade with the region continued to expand, the ASEAN countries collectively became the fourth largest U.S. trading partner, up from fifth place in 2009.

Goods The United States goods trade with ASEAN countries totaled $178 billion in 2010. U.S. goods exports in 2010 totaled $70.4 billion, up 31 percent since 2009. U.S. goods imports from ASEAN were $ 107.8 billion in 2010, up 17 percent since 2009.

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U.S. exports of agricultural products to ASEAN countries totaled $7.6 billion in 2010, up 22.1 percent from 2009. U.S. imports of agricultural products from ASEAN countries totaled $8.6 billion in 2010, up 38.8 percent since 2009. The top five ASEAN export markets in 2010 were Singapore ($29.1 billion), Malaysia ($14 billion), Thailand ($9 billion), Philippines ($7.4 billion), and Indonesia ($6.9 billion). The top 5 ASEAN import suppliers in 2010 were Malaysia ($25.9 billion), Thailand ($22.7 billion), Singapore ($17.5 billion), Indonesia ($16.5 billion), and Vietnam ($14.9 billion). Services Two-way trade in services with ASEAN countries totaled $25 billion in 2009. U.S. services exports in 2009 to ASEAN totaled $15.9 billion, down 2.5 percent from 2008. U.S. services imports from ASEAN were $9.3 billion, down 5.1 percent since 2008. Foreign Direct Investment (FDI) U.S. FDI in ASEAN countries totaled $122.9 billion in 2009 (latest data available), down 5.5 percent since 2008. This FDI was led by nonbank holding companies, manufacturing, and finance/insurance sectors. ASEAN countries' FDI in the United States countries totaled $23.9 billion in 2009, up .2 percent since 2008.

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Chapter-4 Criticism of Asean ASEAN is often criticized for saying on the one hand that democratic principles guide them, while on the other allowing human rights violations to occur in Myanmar, and socialism to rule in Vietnam and Laos. Protesters of free market who fear the loss of local jobs and economies have appeared all over the region, most notably at the 12th ASEAN summit in Cebu in the Philippines. The UN rights chief criticized the lack of transparency during the drafting process. Too soft in promoting human rights and democracy in the junta-led Burma. ASEAN has refused to suspend Burma as a member and also rejects proposals for economic sanctions. European Union refused to conduct free trade negotiations at a regional level for these political reasons. International observers view it as a "talk shop" which means "big on words but small on action". Conclusion After 40 years, many consider ASEAN to be very successful in part because of the ongoing stability in the region. Instead of worrying about military conflict, its member countries have been able to focus on development of their political and economic systems. ASEAN is the fastest growing rate other than nay trade bloc. AFTA helps ASEAN for trading with new countries. ASEAN trade in 99 goods and services and in 220 countries. Figures of ASEAN going up day by day and Its future is also seeing very bright. It just not helps in GDPs of its member states but also the countries who make trade with ASEAN.
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Despite any objections, ASEAN is well on its way to full economic integration and is making great strides to fully assert itself on the world market.

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