Explained Interview | ASEAN summit concludes: What the group means for India

Ashok Sajjanhar, who has served as India’s ambassador to several countries and negotiated for India in the Multilateral Trade Negotiations for India-EU India-ASEAN and the India-Thailand Free Trade Agreement, explains the significance of the recent summit, held in the shadow of US tariff turmoil and the Washington-Beijing trade dispute. He spoke to Yashee.

First, how is ASEAN significant for India?

When the foundation for ASEAN was laid in 1967 with five countries, it was

basically a political organisation to combat the rise of communism. But after that, it has grown into a crucial economic entity and an important security player. Intra-trade in ASEAN, at between 25 and 30%, is second only to the European Union. In that respect, it is a very successful regional economic organisation.

Secondly, it is geopolitically significant for India. The region it is located in frequently sees turbulence because of China’s territorial claims in the South China Sea and the East China Sea.

Then there is the fact that the centre of gravity of the global economy is shifting from the transatlantic towards the Indo-Pacific, and this is right where ASEAN is situated. About 40-50% of India’s trade is conducted through that region.

Fourthly, all the countries in this grouping are rapidly growing economies, making it a very dynamic market.

Fifth, ASEAN has emerged as a significant player on the global stage because all the countries tend to speak with one voice.

Sixth, the region is important for us for connectivity. The India-Myanmar-Thailand Trilateral Highway aims to connect Moreh in Manipur through Myanmar to Mae Sot in Thailand. There is the multi-modal Kaladan project, which aims to connect India’s Northeast to the sea via the Sittwe port in Myanmar.  There is also an agreement on sustainable tourism between India and ASEAN. And of course, India has deep historical and civilisational linkages with these countries. For decades, we could not build upon them because of the Cold War, but as part of the the Look East policy of 1992, upgraded to Act East in 2014, this is now a crucial area of focus.

The group does have internal challenges. ASEAN has been unable to act in any meaningful way on the democratic backsliding in the member state Myanmar. Also, it has failed to counter China’s claims in the South China Sea.

The current summit was watched the world over because of the context in which it was held. Could you elaborate on that?

The trade war between the US and China has special resonance for ASEAN. Earlier, the United States was the security provider for the region and was also a significant economic player. Today, China has emerged as the biggest trading, investment, and technology partner for all these countries. The ASEAN countries thus don’t want to pick sides between the US and China.

But then China has also become increasingly assertive about its territorial claims, specially the nine-dash line. This is a U-shaped line, consisting of nine dashes in the South China Sea, which China uses to stake claims on areas as far as the Paracel and Spratly island chains. While China announced this line more than 70 years ago, it has been taking it up much more aggressively over the past decade or so. So there is that security uncertainty and instability, as many countries in ASEAN and beyond, including Japan and Australia, oppose China’s claims.

The Philippines especially has had a long dispute with China over this. In 2016, the Permanent Court of Arbitration even gave a ruling adverse to China, but Beijing has rejected it.

ASEAN does not confront China on this meaningfully, beyond statements about upholding international law. In recent years, the Philippines on its own has been taking a more muscular stand.

PM Modi in his address pitched for an early review of the India-ASEAN free trade agreement. Why is that needed?

In the free trade deal with ASEAN, signed in 2009, we eventually realised that India was facing distinct disadvantages. First, the tariffs in most of these countries had anyway been low. So the free trade deal did not help us much in terms of markets opening up. However, the other countries did get a huge advantage by crossing India’s tariff protections. This then became a route for Chinese goods to enter India. This is also the reason India has not joined the Regional Comprehensive Economic Partnership (RCEP), which is a free trade deal between ASEAN, Australia, China, Japan, New Zealand, and South Korea.

The review of the ASEAN-India Trade in Goods Agreement (AITIGA) began in 2022 and was to conclude by 2025. That has not happened, but Anwar Ibrahim, the Prime Minister of Malaysia (the current ASEAN chair) has expressed the hope that it would be completed by the end of the year.

You mentioned that ASEAN is a successful economic bloc. Does it hold lessons for the groupings in the neighbourhood that India is part of?

The South Asian Association for Regional Cooperation (SAARC, with Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka) suffers from an existential issue. The government’s firm policy is that terrorism and talks can’t go hand in hand.

But there are other groups, like the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC, with Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand) and BBIN (with Bangladesh, Bhutan, India, and Nepal) that can learn from ASEAN.

On the trade and economy front, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a free trade agreement between 12 countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United Kingdom, and Vietnam) not including China. Its membership can benefit India more than a deal like RCEP.

The most important lesson would be consistency of efforts. ASEAN did not take its present shape in a day, it was a halting, stuttering effort. While it was founded in 1967, it was only after 2002 that it gathered momentum and really took off.

The lesson for India is to give greater energy and focus on groups that don’t have Pakistan — and on the trade front, China — and keep up engagement consistently. From trade to manufacturing to services to technology to fintech, there are many areas in which India can come to the aid of smaller economies. We should capitalise on our advantages to truly emerge as the leader in our neighbourhood.