ECONOMYNEXT – The United States has urged Sri Lanka to get on boards its Indo-Pacific Economic Corridor initiative which aims to weave together an economic block weaving together South Asia, East Asia and Australia with the US.
"The United States encouraged Sri Lankan participation in its Indo-Pacific Economic Corridor initiative to increase economic connectivity among South Asian countries and with Southeast Asia…"
"As fellow democracies, our governments agree that we have a shared interest in working together to foster greater stability, security, prosperity, and a rules-based order for the Indo-Pacific region and around the world,"
Unlike the Association of South East Asian Nations (ASEAN) which recognized the value of free trade early and is becoming increasingly prosperous with high levels of economic freedoms available to citizens, South Asians citizens are poor with shackled trade freedoms.
The US is already linking ASEAN nations with the Americas through the Trans Pacific Partnership.
Sri Lanka has expressed interest in joining the TPP. The TPP is virtually a done deal and Sri Lanka will only have to worry about giving more economic freedoms to its own citizens.
An Indo-Pacific Partnership could ideally create a trading block covering the ASEAN and South Asian Association of Regional Co-operation (SAARC).
But the SAARC itself is decades behind ASEAN, and is still mired in regional politics and old-style economic nationalism which is entrenched in the region, with policy ideology generally favouring vested business interests rather than ordinary people and the poor.
Only Sri Lanka has given visa free access to India and Maldives to encourage people to people contact.
There is no active forum to take forward talks between South and South East Asia.
But the joint statement suggested that IPEC was in line with existing efforts to create regional linkages with Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) involving Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan and Nepal.
President Barrack Obama during a visit to India in 2015, also pushed the IPEC initiative, which is initially not aiming at reducing duties but is more about creating physical linkages that paves the way for more trade and regional economic links.
"Complementing India’s Enhanced Look East Policy, the United States envisions an Indo-Pacific Economic Corridor that can help bridge South and Southeast Asia – where the Indian and Pacific Oceans converge and where trade has thrived for centuries," the US Commerce Department said last September.
"Fostering these types of connections – physical infrastructure, regulatory trade architecture, and human and digital connectivity – will create linkages all the way from Central Asia to Southeast Asia, via South Asia.
"A more integrated South Asia where markets, economies, and people connect is more likely to thrive and prosper.
"The United States is firmly committed to the security and prosperity of the Asian continent, and better connectivity, energy security, and stronger trade and investment links can help realize that objective. "