India-ASEAN: Enormous Potential for Agricultural Cooperation
By Aamir H Kaki
Over the past several decades, global agricultural trade patterns have changed dramatically, particularly with the emergence of developing countries as exporters and importers. While exports from developing countries to developed markets have been impressive, it is obvious that developing countries are also looking towards other developing countries’ markets for growth.
However, high tariffs and prevalent non-tariff barriers in developing countries remain a constraint to even greater trade growth rates. Much of the growth in global trade in the past decade has been a result of sharp rises in agricultural exports from developing countries. Over the past decade, of the 15 largest agricultural economies, the nine with highest growth rates are all developing countries: India, Ukraine, Indonesia, Brazil, Malaysia, Turkey, Thailand, Argentina and China.
On the other hand, agricultural trade liberalisation has been a sensitive issue in trade negotiations due to the economic and political significance of agriculture. In order to protect their large agricultural employment and livelihoods, developing countries seek more favourable concessions in agriculture market access to developed countries.
ASEAN: Increasing Cooperation in the Region
The Southeast Asian region is fast progressing towards trade liberalisation. Since its establishment in 1967, the Association of Southeast Asian Nations (ASEAN) has increased its membership from five original countries (Indonesia, Malaysia, Philippines, Singapore, and Thailand) to six in 1984 with the accession of Brunei Darussalam, known as ASEAN 6. The membership of ASEAN expanded further to 10 when Cambodia, Myanmar, Lao PDR and Vietnam, known as CMLV, joined the Association between the period 1995 and 1999. The expansion in membership indicates the increasing awareness of the importance of joint effort and cooperation as a potential force in accelerating economic growth, social progress and cultural development, and in promoting regional peace and stability amidst diversities in resource endowments, considering the disparities in macro and agricultural economic development and trade conditions.
India-ASEAN: Agricultural Exchanges
India became a sectoral dialogue partner of ASEAN in 1992 and a full dialogue partner in 1995 and the two have been having summit level meetings since 2002. As agriculture is a critical sector for the economy of India as well as ASEAN Member States, an India-ASEAN Working Group on Agriculture has been setup. In view of commonality of several areas and issues, the cooperation aims to facilitate promotion of joint research for development of technologies for increasing production and productivity of crops, livestock and fisheries, and natural resources management, among others, in the region as well as in development of joint ventures, exchange of technologies, expertise and material.
India’s economic relations with the member countries of the ASEAN have undergone major changes as the ASEAN-India Free Trade Agreement (AIFTA) has come into force since January 1, 2010. While in 1995, Singapore followed by Indonesia were the most important markets for India within ASEAN, Malaysia and Thailand also became more important later on. With the signing of AIFTA, India has made commitments to reduce or eliminate tariffs for over 89 percent of all of its agriculture, marine and manufactured goods by 2016.
Since then, significant developments took place in the cooperation in agriculture and forestry sector between India and ASEAN. The first ASEAN-India Agriculture Working Group Meeting was held in New Delhi on January 29-31, 2011. The meeting was attended by delegates from the 10 ASEAN member states. In addition, representatives from the ASEAN Secretariat also attended the meeting.
The second meeting of the ASEAN-India Working Group on Agriculture and Forestry was held on March 6-8, 2012 in Palembang, South Sumatra, Indonesia. In the course of the meeting various activities were proposed for enhancing India-ASEAN cooperation in Agriculture. These proposed activities have been confirmed by ASEAN Secretariat and they are classified under Short-Term Plan (for implementation in 2011-12), and Mid-Term Plan (for implementation during the period 2011-15). The third ASEAN-India Working Group on Agriculture & Forestry meeting was held on May 6-7, 2013 in New Delhi.
In addition, a number of cooperative activities in this area have been carried out, most notably the ASEAN-India Agri-Expo and the symposium on Indo-ASEAN Export Potential of Agriculture Products that were organised on October 17-19, 2012 and October 18, 2012, respectively, in New Delhi; publication of the regular edition of the ASEAN-India newsletter on Agriculture and Forestry since 2012; ASEAN-India Farmers Exchange Programme; and the Conference of Heads of Agriculture Universities and Research Institutions of India and ASEAN organised on February 18-21, 2013, in New Delhi.
India-ASEAN FTA: Facilitating Agri Trade
The Framework Agreement on Comprehensive Economic Cooperation between ASEAN and India was signed on October 8, 2003, during the Second ASEAN-India Summit in Bali, Indonesia. The Framework Agreement prescribed for starting negotiations for FTA in Goods, and Agreements on Services and Investment. It also suggested having economic cooperation on several areas of mutual interest, including trade facilitation, harmonisation of customs procedures etc.
The negotiations on Trade in Goods have been concluded and the Free Trade Agreement (FTA) in goods was signed between India and the 10-member ASEAN during the year 2009. The FTA in goods focuses on tariff liberalisation on mutually agreed tariff lines from both sides and the tariffs will be eliminated on 80 percent of the tariff lines accounting for 75 percent of the trade in a gradual manner starting from January 1, 2010. The agreement also provides for excluding the domestically sensitive items from the tariff reduction or elimination. Likewise, ASEAN members have also maintained individual similar lists for Indian exports.
ASEAN and India are natural partners having a shared culture of values and practices. Agriculture is critical for the economies of these countries. One of the major challenges confronting agriculture in India as well as ASEAN countries is to achieve the goal of faster but inclusive economic growth in a sustainable manner. The principles of enhanced productivity, profitability, environmental and human safety remain at the core of the development. With enormous wealth of natural resources and expertise available in the region mutual cooperation between India and ASEAN states could play a significant role in the development process in the region and also ensure faster progress.