India and Southeast Asia: Towards Security Convergence

Appendix III: Framework Agreement on Comprehensive Economic Cooperation between the Association of Southeast Asian Nations and the Republic of India

216 INDIA AND SOUTHEAST ASIA: TOWARDS SECURITY CONVERGENCE Appendix III FRAMEWORK AGREEMENT ON COMPREHENSIVE ECONOMIC COOPERATION BETWEEN THE ASSOCIATION OF SOUTHEAST ASIAN NATIONS AND THE REPUBLIC OF INDIA PREAMBLE WE, the Heads of State/Government of Brunei Darussalam, the Kingdom of Cambodia (Cambodia), the Republic of Indonesia (Indonesia), the Lao People’s Democratic Republic (Lao PDR), Malaysia, the Union of Myanmar (Myanmar), the Republic of the Philippines (the Philippines), the Republic of Singapore (Singapore), the Kingdom of Thailand (Thailand) and the Socialist Republic of Viet Nam (Viet Nam), Member States of the Association of Southeast Asian Nations (collectively, “ASEAN” or “ASEAN Member States”, or individually, “ASEAN Member State”), and the Republic of India (India); RECALLING that in 2002, we had agreed on the importance of enhancing our close economic cooperation and to work towards an ASEAN–India Regional Trade and Investment Area (RTIA) as a long-term objective; DESIRING to adopt a Framework Agreement on Comprehensive Economic Cooperation (this Agreement) between ASEAN and India (collectively, “the Parties”, or individually referring to an ASEAN Member State or to India as a “Party”) that is forward-looking in order to forge a closer economic partnership in the 21st century; DESIRING to minimise barriers and deepen economic linkages between the Parties; lower costs; increase intra-regional trade and investment; increase economic efficiency; create a larger market with greater opportunities and larger economies of scale for the businesses of the Parties; and enhance the attractiveness of the Parties to capital and talent; RECOGNISING the important role and contribution of the business sector in enhancing trade and investment between the Parties and the need to further promote and facilitate their cooperation and utilisation of greater business opportunities provided by the ASEAN–India RTIA; 09 India&SEA Appendix 11/11/05, 8:21 AM 216 RECOGNISING the different stages of economic development among ASEAN Member States and the need for flexibility, including the need to facilitate the increasing participation of Cambodia, Lao PDR, Myanmar and Viet Nam (the New ASEAN Member States) in the ASEAN–India economic co-operation and the expansion of their exports, inter alia, through the strengthening of their domestic capacity, efficiency and competitiveness; REAFFIRMING the rights, obligations and undertakings of the respective parties under the World Trade Organisation (WTO), and other multilateral, regional and bilateral agreements and arrangements; and RECOGNISING that regional trade arrangements can contribute towards accelerating regional and global liberalisation and as building blocks in the framework of the multilateral trading system, HAVE AGREED AS FOLLOWS: ARTICLE 1 Objectives The objectives of this Agreement are to: (a) Strengthen and enhance economic, trade and investment co-operation between the Parties; (b) Progressively liberalise and promote trade in goods and services as well as create a transparent, liberal and facilitative investment regime; (c) Explore new areas and develop appropriate measures for closer economic co-operation between the Parties; and (d) Facilitate the more effective economic integration of the new ASEAN Member States and bridge the development gap among the Parties. ARTICLE 2 Measures For Economic Cooperation The Parties agree to enter into negotiations in order to establish an ASEAN–India Regional Trade and Investment Area (RTIA), which includes a Free Trade Area (FTA) in goods, services and investment, and to strengthen and enhance economic cooperation through the following: (a) Progressive elimination of tariffs and non-tariff barriers in substantially all trade in goods; (b) Progressive liberalisation of trade in services with substantial sectoral coverage; Framework Agreement on Comprehensive Economic Cooperation 217 09 India&SEA Appendix 11/11/05, 8:21 AM 217 218 INDIA AND SOUTHEAST ASIA: TOWARDS SECURITY CONVERGENCE (c) Establishment of a liberal and competitive investment regime that facilitates and promotes investment within the ASEAN–India RTIA; (d) Provision of special and differential treatment to the New ASEAN Member States; (e) Provision of flexibility to the Parties in the ASEAN–India RTIA negotiations to address their sensitive areas in the goods, services and investment sectors with such flexibilities to be negotiated and mutually agreed based on the principle of reciprocity and mutual benefits; (f) Establishment of effective trade and investment facilitation measures, including, but not limited to, simplification of customs procedures and development of mutual recognition arrangements; (g) Expansion of economic cooperation in areas as may be mutually agreed between the Parties that will complement the deepening of trade and investment links between the Parties and formulation of action plans and programmes in order to implement the agreed sectors/areas of co...