Opinion

Comparing Asean and Saarc

Asean will no longer be prickly with sovereignty issues; it will focus on common trade policy.

Khaled Ahmed April 16, 2011

The Association of Southeast Asian Nations (Asean) was founded in 1967 and it has just announced that by 2015 the states included in it will have become a single market like the European Union (EU). Asean already trades 25 per cent within itself, which means it is fairly set to become a regional trading bloc like the EU. One can see what has happened. Like the EU, the nation-state is being transformed to get rid of conflict.

Europe went through two traumas; the religious wars spread over centuries, and the nationalism of the nation-state that led to two world wars and laid the continent waste. The first stage is the conversion of the warrior state to a market state, then its submergence in the regional identity. Starting 2015, Asean will no longer be prickly with sovereignty issues; it will give up foreign policy in favour of a common trade policy. Asean started with founding members Indonesia, Malaysia, the Philippines, Singapore and Thailand; then added Brunei Darussalam, Cambodia, Laos, Myanmar and Vietnam in later years.

The South Asian Association of Regional Cooperation (Saarc) came into being in 1985, with founding members Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. Afghanistan joined in 2007. Both were set up because the members were embroiled in serious disputes. Perhaps Asean was more troubled because of its conglomeration of islands and unclear laws dealing with maritime frontiers. Yet, while Asean was able to avoid conflict, Saarc was not.

What was the reason? Some say Asean was a grouping against an outside threat — communism, while in the case of Saarc the enemy was within — India. Yet, Asean members had serious interstate disputes which they decided to forget. On the other hand, Saarc members insisted that disputes be resolved first, before economic cooperation could start. Asean nations were inclined to be trading nations; Saarc nations were inclined to be warlike. Asean moved to conflict-avoidance mechanisms; Saarc refused to discuss bilateral disputes.

Not discussing disputes did not mean that Saarc gave priority to trade. Asean took no time in agreeing (1997) on two types of free trade areas (Afta) while Saarc made heavy weather of its South Asian Preferential Trade Area (Sapta), signed in 1993. It signed the South Asian Free Trade Area (Safta) in 2004 but added to the agreement Article 14, stating that ‘nothing in this Agreement shall be construed to prevent any Contracting State from taking action and adopting measures which it considers necessary for the protection of its national security’ while leaving some room in the interpretation of what might constitute an issue of national security.

Saarc had to suffer an Indo-Pakistan war at Kargil started by Pakistan in 1999, which prevented three Saarc summits from taking place. India has given Pakistan the most favoured nation status but Pakistan has not reciprocated. In 2008, war loomed again after Mumbai was attacked by a jihadi outfit from Pakistan. Pakistan complains that India is destabilising it; but Pakistan is internationally isolated as it tackles intra-state conflict, its growth rate not matching that of other Saarc members.

Dominated by the army and increasingly vulnerable to passions of national honour inculcated by terrorist groups, Pakistan needs to concentrate on a trade-and-investment regime on a regional basis and also concentrate on improving on the bilateral free trade agreement with India to prevent the security-related restrictions applied by the two on the 2,000-item trade they have allowed so far. India also needs to improve its trade conduct in respect of the non-tariff barriers it applies to what it imports and the concealed subsidy it allows its own products.

Published in The Express Tribune, April 17^th, 2011.

COMMENTS (15)

omar | 13 years ago | Reply Khalid Ahmed is absolutely right, but the question is "who will bell the cat"? Zardari has proven more capable than most people thought, but that is not saying much. It needs superhuman skills to beat the suicidal "paknationalist" agenda without destroying the country and Zardari bhai, while courageous and determined, is clearly not superman...

Neeraj, India | 13 years ago | Reply SAARC is a ridiculous idea. A union is formed amongst equals. Look at the Asean countries, their economies are more or less of the same size. Same can be said bout the EU. Now have a look at SAARC countries. With a 1.8 trillion dollar economy, India is a giant compared to its neighbors. What can India gain by forming a union with the tiny Maldives? A total dependents like Bhutan and Nepal? It is ridiculous to talk about trade union with a bankrupt Pakistan and the new member Afghanistan with no economy at all! As for Bangladesh and Sri Lanka, India is already a major trading partner of the both. However, Indian economy has reached a point where it needs to closely integrate with groupings such as Asean and the EU. Apart from them, a rich China is a major attraction for India. She is already our biggest trading partner and there exists an immense potential for the growth in the bilateral trade.

VIEW MORE COMMENTS

bhutjolokia | 13 years ago | Reply Pakistan can only play a spoiler. How depressing it must be, to have only a negative narrative, whether in trade or identity or foreign policy.

Anoop | 13 years ago | Reply India has been increasing Trade with all the SAARC countries except Pakistan. Pakistan is the only country which hates India so much that it doesn't even trade in the right spirit, forgetting that ultimately its Pakistan's loss, not India's.

SKChadha | 13 years ago | Reply One - Business is a process by which both trading parties gain. No trade can happen between two nations where one gain and another loose. Two – In multi-lateral world trade demanding bilateral export import parity (calculating trade deficit) with any nation is a misnomer. The trade deficit is required to be calculated by any nation on collective basis. Three - It never happens in trade that you sell your product to the same person from whom you buy goods. The need is to lift the country specific restrictions by nations for regional trade. Protectionism with neighbours deteriorates standards which we require to understand. To begin with providing MFN status to each other within SAARC/ ASEAN nations is the right solution wherein nations are declaring/ restricting trade only with keeping items on their negative lists. It is to be seen as to when Pakistan grants India MFN status.

SaudiRules | 13 years ago | Reply @Authore..agree with almost al you have written...but.. What about Gharait? China is "All weather Friend" (for what? No one knows) who has won hearts and mind of khakis and their Lotas without realy doing much for the country!!! Except that the khakis/awam think that the chines can show them injians, hence the love for the chinese :D If the awam thinks that we were used like condem by the US/West for most of our existence, courtesy, who else but the Khakis; they will be shocked beyond belief when the khakis are done selling pakistan to the chinese (cheaply)! China has only one "true allweather friend", herself! The "defender of the land of pure" dont realize that china will change its foreign policy in an instant. If she is convinced that having good ties with India has much more economic advantage that with the "land of pure", she will leave the "Wanna be all weather friend" sulking with dark clounds, whom the khakis are going to turn to then? Iranians?

ron(Indian) | 13 years ago | Reply the main question is how will pak milltary survive if civillian government make peace with India????

vasan | 13 years ago | Reply Here is my suggestion; Pakistan can form a free trade association with the Arabs whom they claim to be their ancestors.

JERRY | 13 years ago | Reply Mr. Writer Khaled Ahmed your comments about India while in the case of Saarc the enemy was within — India Being a wirter on newspaper ,Doesn't give anyone RIGHT to write impurity of posion mind. Writer like you should behave more responsible ,Sensible then your reader comments. It is not at all surprise to see you Spewing Venom on your ARCH ENEMY India. Let me get back to the central theme of the article, Should India Start doing Normal Business with Pakistan? My Answer to GOI , Absolutely NO----Unless Pakistan comes clear of Terror as Foreign Policy.Any GOI will go against the will of Indians ( When i say Indians ,It Include HINDU,PARSI,CHRISTIAN,JAIN,SIKH,Buddhist and Ofcourse MUSLIMS),will face dire Consequence for future. We are tired and sick of Pakistan as our Neighbour who sponsored Terror for last 65+ yrs. Change your mindset first,YES ,first and foremost writer and columnist like you have to change your MINDSET ,otherwise we are ok with our status quo, No need to improve on our relation, India will go ahead with or without doing business with pakistan ,At present it is Pakistans need to have good relation with INDIA.

Vicram Singh | 13 years ago | Reply @author: "Some say Asean was a grouping against an outside threat — communism, while in the case of Saarc the enemy was within — India." Enemy ? India ?

Aryabhat | 13 years ago | Reply India already has FTA with ASEAN. It has reciprocal and open trade relations with Sri Lanka, Nepal, Bhutan, and Bangladesh. So who is the spoilsport in SAARC trade liberalisation? No points for guessing there! "Non-tarriff barrier for Pakistani goods in Indian market hampering its access" is a smoke screen! If that is the case then how come other ASEAN, SAARC states and Japan/Korea didn't have issues with it? Beyond the region, India has now FTA with Japan, and South Korea, while FTA with EU is in final stages of negotiations. It takes years to get an FTA arrangement and fruits one can reap are long term and strategic. When will Pakistan understand that it is missing out on making its people propsporous, by neing the "spoiler" state?

John | 13 years ago | Reply Except PAK, all other nations of SAARC are living in peace with each other and trade is flowing smoothly, despite different systems of government and internal conflicts. India obsession is the demise of PAK and she drags Afghanistan along with this obsession. PAK obsession to PAK should be the turning point. But, does PAK want to be in SAARC for her trade? An objective economist looking at the geography would say yes. Will it happen, beyond the limited trade in vogue? The next 5 years are key to watch. If not by then, the rest of the SAARC becomes one contiguous boundary in trade.

TightDhoti | 13 years ago | Reply Pakistan sits on the borders of two giant markets China and India. China is our "all weather friend" yet we have a massive trade deficit with her, as there is very little we can offer to export to her, apart from the pipe dream of Gawadar as an energy conduit running up the KKH into Western China. India is our "enemy" and both officially and unofficially we have a massive trade deficit. Yet, as food prices soar, markets for Pakistani commodities are present in India yet that avenue is hardly leveraged. We need to make money talk, and trade happen now!

indian | 13 years ago | Reply It will never gonna happen!! SAARC minus pakistan will become closely integrated economy hub and its happening!1 1.india is linking road,railways to nepal,bhutan,bangladesh and srilanka 2.pakistan can say bye bye and keep ranting kashmir slogan!!

faraz | 13 years ago | Reply Foreign policy dictated by trade and investment will prove fatal for the mullah military alliance. Bogey of national security is essential for its survival. Kargil was launched by Musharraf precisely to counter efforts by civilian regime to improve relations with India. Mumbai attacks launched by local terrorists effectively derailed the peace talks with India. It all comes down to the imbalance between civilians and the military.

Replying to X