TRADE RELATION BETWEEN INDIA AND SOUTH-EAST ASIA ALONG WITH ASEAN COUNTRIES

Introduction: The development of trade and economic arrangements between India and South-East Asia must be rooted within the larger processes of economic and diplomatic exchanges in Asia. The existence of regional organizations is not a new phenomenon but their success has been more or less conclusive. Indias experiments at regional cooperation through SAARC (South Asian Association for Regional Cooperation), have been rather disappointing because of conflicting political equations among members. On the other hand, ASEAN (Association of South-East Asian Nations) a successful model of regional cooperation started its revolutionary growth in the 1990s, thanks to the creation of AFTA (ASEAN Free Trade Agreement, 1992) and the 1997-1998 financial and economic crisis in the region. In East Asia, the regional process had first been driven by the private sector, but the crisis acted as a catalyst for more State-governed cooperation. Moreover, the drive towards regionalism in Asia is a consequence of the reconfiguration of the world order, in terms of military and economic security. Nevertheless, earlier modes of regional cooperation, hangovers of precolonial times and ententes such as the Non-Aligned Movement still remain in place and are peculiar to Asian international relations. Presently, a new regional process that is evolving is the East Asia Summit. The development of the relations between India and South-East and East Asia is also now encouraged by Japan, which has long been a fierce opponent of regional construction. These days, South-East Asian countries and ASEAN consider being a hub between North-East Asian economies and India. India and South East Asia Trade Relations: Contrary to the founding of the European Community, the East Asian Community is about to be built on a much more insecure and shifting political, economic and social environment. For instance, the strength of the Franco-German leadership of the European Union has been an accepted fact, while it will be much more difficult to find an acceptable check and balance within the East Asian region. One of the major reasons for the evolution of the ASEAN-India entente is the perceived hegemony of China in Asia. South-East Asian States (as well as Japan, the United States or even Russia) are very interested in balancing Chinese power by India in the region. The Peoples Republic of China (PRC) is gradually taking a bigger place on the world scene, economically and military speaking. Since the Asian crisis and the

Chinese entry to WTO (World Trade Organization), its capacity to trade and to attract FDI (Foreign Direct Investment) has indeed increased considerably. The development of the relations between India and South-East and East Asia is also now encouraged by Japan, which has long been a fierce opponent of regional construction. In this context, New Delhi has taken the opportunity to develop its trade and to adopt a more liberal trade and economic system, especially in collaboration with its South-Eastern neighbours. These days, South-East Asian countries and ASEAN consider being a hub between North-East Asian economies and India. Thus, integration in the region is at its first step, but it provides for the emerging structure of the creation of an East Asia trade block. To that respect, ASEAN will certainly go faster and deeper than its neighbours and it is the only Asian Organization that envisages creating a single market and production base by 2020. The association between India and South-East Asia, in particular ASEAN and its memberStates reflects the overall tendencies of the emerging regional infrastructure of East Asia. It is based on an outburst of economic and trade agreements, which set-up economic cooperation and preferential and/or free trade zones. The trade and economic relationship recently elaborated between India and South-East Asia gives a feeling of profusion and redundancy. A close scrutiny of the arrangements nevertheless tempers this first impression because the organic structure and substantive law finally provide for certain coherence among them. They are quite similar from a material and structural point of view, influenced by the same liberal philosophy and by the Asian conception of State sovereignty. So far, these developments have given a positive and dynamic face to the region, even if there is in fact a true problem of effective enforcement of the cooperation and liberalization programmes. In addition, the institutional and material framework reflects the state of advancement of the regional process, while giving a lot a flexibility and potentiality to the latter. Hopefully, trade and economic liberalization is supported by economic and trade constant growth within the region. However, it seems useful to improve the transparency of institutional and substantive law, especially through the clarification and improvement of relations between the different arrangements and groupings and a progressive harmonisation of normative and operational projects. Conclusion: India and South-East Asia have different interests and economic and political culture and the post-independence unity lasted a moment only. East Asia and India are nevertheless at the crossroads. ASEAN have to keep the balance between the two main poles of its external Asian policy that is North-East Asia and India.

However, one of the most difficult challenges is to agree on the direction regionalism must take in the near future. There is indeed a big discrepancy between the multiplicity of trade and economic liberalization programmes and the reality of enforcement and implementation of the agreements. The creation of a Free Trade Area seems to be the only common mission of the regional construction. Reduction of elimination of custom duties could nevertheless be very well realised in other forums, such as WTO. Furthermore, the divergence between the rhetoric of unity and the difficulty to adopt an integrated institutional system is equally problematic, especially if a major difficulty arises, as it was the case during the financial and economic Asian crisis. Even if there is some progress towards enforcement of law through the development of dispute settlements mechanisms, most projects also suffered from being the fruit of non-binding texts. For a major growth of trade and investments in the region, legal security must be ensured.