ASEAN and Sri Lanka: Prospects for a Sectoral Dialogue

Rationale

The South East Asian economies came together under the umbrella of the Association for South East Asian Nations (ASEAN) in 1967. Like their European counterparts, ASEAN was initially regarded more as a political forum, intended to provide a "buffer" against the spread of communism in East and South East Asia, rather than as a group with an explicit commitment to promote economic cooperation in the region. Thus, it was almost 25 years after its initial establishment that ASEAN took the initiative to accelerate economic integration through the creation of a regional free trade area.

Sri Lanka, which had been invited to accept membership of ASEAN from its inception, opted instead to maintain its commitment to a "non-aligned" status. Global economic changes in the 1980s, however, prompted Sri Lanka to review its position, vis-à-vis membership of regional blocs, and it became a member of the South Asian Association for Regional Cooperation (SAARC) in 1985. The latter part of the 1980s saw a proliferation of new regional trade blocs, and the emergence of three distinct economic power blocs in North America, Europe and East Asia. As the increasing cost of being on the periphery of these growth centres was becoming more apparent, Sri Lanka unsuccessfully sought to establish a dialogue partnership with ASEAN in 1992. ASEAN's relations with third countries are presently at full dialogue or sectoral dialogue levels. The process of becoming a full dialogue partner starts with sectoral cooperation.

Objectives

In this context, this paper makes an attempt to establish the economic relations between Sri Lanka and ASEAN in a renewed attempt to gain a dialogue partner status with ASEAN. The study assesses existing trade, investment and tourism relations between Sri Lanka and ASEAN economies, and examines the potential and benefits of closer cooperation in these sectors. The paper consists of the following: a review ASEAN's cooperation and dialogue relations; an outline of the existing economic links between Sri Lanka and ASEAN in the arenas of trade, investment and tourism; and, an assessment of the likely prospects for establishing dialogue relations between Sri Lanka and ASEAN.