SINGAPORE, March 8: Free trade agreements are vital for the Association of Southeast Asian Nations (ASEAN) to maintain its relevance under the lengthening economic shadows of giant neighbours China and India, a Singapore minister said on Friday.

Initiatives for ASEAN to forge free trade links with China, Japan and India as well as efforts by individual members to negotiate bilateral free trade agreements (FTAs) should augur well for the 10-nation grouping, said Minister of State for Foreign Affairs and Trade and Industry Raymond Lim.

This spate of activity marks a milestone in ASEAN’s entry into the new era of global economic relationships where FTAs play a major part, he said at a symposium on FTAs here.

This has a snowballing effect. With each new initiative, ASEAN’s other trading partners become even more interested in strengthening their linkages with us, he said.

Lim said the 36-year-old regional bloc is facing tougher competition from China, which has been getting the bulk of foreign direct investment into Asia, and India which is also making strides to strengthen its trade.

ASEAN also faces competition as a manufacturing base from beyond Asia, particularly Latin America, he said.

In this competitive environment, it is vital that ASEAN remains relevant, said Lim, whose country has signed FTAs with Australia, New Zealand, Japan and the European Free Trade Association, and is awaiting the implementation of a free trade deal with the United States this year.

Lim noted that other ASEAN countries have decided to negotiate their own free trade pacts with their trading partners a move that will prompt these nations to strengthen their own capacity to compete.

ASEAN as a whole is looking at setting up FTAs with Japan, China and India within the next 10 years, while the US has announced it intends to pursue greater trade links with ASEAN.

Lim said FTAs will play a key role in promoting ASEAN as an investment destination and trading partner.

By nurturing its FTA strategy and strengthening linkages with its major trading partners, ASEAN will become even more attractive as a single market and a single manufacturing base, he said.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam with a total population of about 500 million people. —AFP