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India has signed a major new free trade agreement with the ASEAN trading bloc. Considering the significant amount of trade between the two areas, this free trade agreement will have a great deal of impact on the regions and the world – although it is merely half as large as the recent EU-South korea trade agreement, which covers $95 billion in trade.

“This agreement is aimed to help fighting the situation like global crunch, as there will be minimum duties on goods amongst their trading in ASEAN countries. The trade size between India and ASEAN countries is huge and its size is around 48 billion dollars. This Free Trade will come into force from July 2010,” said N Ravi, Secretary (east), Minister of External Affairs while talking to media about the day’s development on Saturday evening.

This trade agreement will come into effect before the EU-South Korea trade agreement as well, considering all EU member-countries must still ratify the agreement. With the approval of Vietnam, the India-ASEAN agreement is poised to be implemented in just 9 months.

Shortly after the India free trade agreement was signed, a trade spat between Philippines and  Thailand broke out regarding rice tariffs within the 10 ASEAN countries. Although ASEAN is busy implementing trade agreements with its neighbors, including China, they are still negotiating the terms to reduce trade barriers and eliminate tariffs within their trading bloc. To give them credit, they do have their own ASEAN anthem.

While in Thailand to work towards creating an EU-style single market, the Philippines – the world’s largest importer of rice – insisted to keep its tariff levels at 35 percent, and in exchange it promised to import 50,000 tonnes of Thai rice duty-free each year. But Thailand, the world’s largest rice exporter, says it wants a quota of more than seven times that amount.

According to the International Centre for Trade & Sustainable Development:

Despite the ongoing feud, the Asian leaders say they will push ahead in their efforts to conclude an ASEAN Trade in Goods Agreement (ATIGA).

”Our negotiations are moving forward,” Blinks Kabigting, a trade official from the Philippines, told Reuters. “We agree not to talk nasty in the press and focus on finding ways to resolve our differences.”

The ASEAN group comprises Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. The combined population of the region is more than twice that of the United States, and leaders hope to create an EU-style single market for the free flow of goods, services, investments and skilled labor by 2015.