UPSC Prelims 2018 Q34: Indian Economy – International Trade & WTO
- (a) 1, 2, 4 and 5
- (b) 3, 4, 5 and 6
- (c) 1, 3, 4 and 5
- (d) 2, 3, 4 and 6
Answer: (c) 1, 3, 4 and 5
Explanation
ASEAN Free-Trade Partners
ASEAN (10 members: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam) has signed ASEAN+1 Free Trade Agreements with the following partners:
| Country | ASEAN FTA? | Detail |
|---|---|---|
| 1. Australia | YES | ASEAN-Australia-New Zealand FTA (AANZFTA, 2009) |
| 2. Canada | NO | No ASEAN-Canada FTA as of 2018 (talks ongoing since 2021) |
| 3. China | YES | ASEAN-China FTA (ACFTA, 2010) |
| 4. India | YES | ASEAN-India Trade in Goods Agreement (2010); Services + Investment (2014) |
| 5. Japan | YES | ASEAN-Japan Comprehensive Economic Partnership (AJCEP, 2008) |
| 6. USA | NO | No ASEAN-USA FTA; US has bilateral FTAs with Singapore, and TIFA framework |
FTA Partners of ASEAN: Australia + New Zealand, China, India, Japan, South Korea, Hong Kong.
Answer: (c) 1, 3, 4 and 5 (Australia, China, India, Japan).
Why each option is right or wrong
- (a) Incorrect. This includes Canada, which does not have an ASEAN FTA.
- (b) Incorrect. USA does not have an ASEAN-wide FTA.
- (c) CORRECT. Australia, China, India and Japan all have ASEAN+1 FTAs.
- (d) Incorrect. Canada and USA are not ASEAN FTA partners.
Key point
ASEAN+1 FTA partners: Australia+NZ (AANZFTA 2009), China (ACFTA 2010), India (AIFTA 2010), Japan (AJCEP 2008), South Korea (AKFTA 2007), Hong Kong (2017). Not Canada or USA (as of 2018).
Remember
As of 2018, ASEAN had signed ASEAN+1 free trade agreements with Australia (with New Zealand), China, India, Japan, South Korea and Hong Kong. Canada and the United States did not have an ASEAN-wide FTA - they engaged through Dialogue Partner mechanisms or bilateral treaties.
Common mistakes
- Assuming USA has an ASEAN FTA - USA has bilateral trade deals but not an ASEAN-wide FTA.
- Missing that Canada, while a Dialogue Partner of ASEAN, does not have a signed FTA yet (talks began 2021).
- Confusing RCEP (mega FTA, Nov 2020, without India) with the older ASEAN+1 FTAs - RCEP includes Australia, China, Japan, South Korea, New Zealand.
Exam tip
ASEAN's 6 FTA partners: Australia-NZ, China, India, Japan, South Korea, Hong Kong. RCEP = these + ASEAN 10 - India. India walked out in 2019 due to tariff and Chinese import surge concerns.
Sources
- ASEAN — Framework Agreement on Comprehensive Economic Co-operation between ASEAN and China (2002); ASEAN–India Framework Agreement on Comprehensive Economic Cooperation (2003)
- Ministry of Commerce and Industry - ASEAN-India Trade in Goods Agreement