Framework Agreement on Comprehensive Economic Co-Operation Between India and ASEAN: First Step Towards Economic Integration‪.‬

I. Introduction Regional co-operation agreements in the past were regarded as precursors to inward-oriented economic blocs and, therefore, stumbling blocks to multilateral trade. However, they are now considered as complementing and having a positive affect on global trade liberalization (if they are consistent with WTO provisions) and are becoming the order of the day all over the world. Declining market access in the emerging patchwork of formidable regional trading blocs in Europe and America is causing fear of economic isolation in many Asian economies. Driven by challenges of globalization and growing economic interdependence in Asia, both ASEAN and India are actively pursuing free trade agreements with their trading partners within and outside the region. China's emergence as a trade and investment powerhouse and its entry into the World Trade Organization (WTO), affecting competitiveness in exports and foreign direct investment (FDI), have further contributed to the need for closer economic integration with trading partners. The inherent limitations of building up liberalized multilateral trade and the recent collapse of WTO talks in Cancun have added urgency to the process. India has existing free trade agreements (FFA) with Sri Lanka and Nepal and has recently signed a framework agreement towards establishing a FTA with Thailand and is negotiating FTAs with many countries including Singapore. (1) ASEAN has signed the framework agreements with China, Japan, and India to set up a free trade area within the next ten years, in addition to seeking bilateral FTAs, with Singapore taking the lead.