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  1. Negotiations

China-ASEAN

In November 2001, China and the 10-member Association of South East Asia Nations (ASEAN) began negotiations to set up a free trade area.

One year later, a framework agreement for the planned FTA was signed. The FTA, a zero-tariff market of more than 1.7 billion people, has been targeted to come into force in 2010 for the six original ASEAN members (Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand) and in 2015 for the other four (Burma, Cambodia, Laos and Vietnam). Implementation of the framework agreement would occur in stages. For instance:

- An early harvest programme covering trade in goods came into force in July 2005.
- Negotiations on a dispute settlement mechanism were finalised in 2004 for implementation in 2005.
- Negotiations on trade in services were completed and an agreement signed in January 2007, for implementation in July 2007.
- The China-ASEAN investment agreement was to be signed at the ASEAN Summit in Thailand in December 2008.

Separately, China signed a bilateral FTA with ASEAN member Singapore in October 2008. Beijing has also been hammering out a lot of separate, smaller and more specific bilateral deals with ASEAN neighbours, such as the infamous Philippine-China investment agreements (the subject of huge corruption scandals in the Philippines in 2007), harmonised food safety standards with Thailand (to facilitate agricultural trade) and numerous arrangements with the Mekong Delta countries.

Politics around the China-ASEAN deal are delicate as ASEAN states want to avoid China’s domination and yet build their economies by interacting with China, especially given the slowdown in demand from the US and European markets. At the same time, China is moving up the manufacturing value-chain losing need for primary products that ASEAN states produce while its search for raw materials such as minerals and oil has rapidly gone global. Finally, the coming into force of full-scale zero-tariff farm trade with China from 2010 onward has raised many fears in the ASEAN world.

last update: May 2012
Photo: MangAndri Kasep / CC BY 2.0

China-ASEAN FTA agreement benefits China’s textile export
21-Jan-2006 Xinhua
Since China and the ASEAN started their tariff reduction process on July 1, 2005 on the basis of the China-ASEAN Free Trade Area (CAFTA) agreement, the ASEAN would gradually lower its tariff upon Chinese textile and apparel, which may increase China’s textile export to this region.
Pact’s progress
9-Jan-2006
The China-ASEAN FTA will form a huge market, with 1.85 billion consumers and a combined gross domestic product of almost US$2.5 trillion. Both sides hope to establish an FTA by 2010, and will gradually reduce export tariffs until then.
China, ASEAN march towards world’s 3rd largest FTA
23-Oct-2005 People’s Daily
With a fast growing trade volume, China and the Association of Southeast Asian Nations (ASEAN) are trying to show the world that the planned free trade area will be an accelerator for regional economy.
China-ASEAN FTA steps into implementation period
19-Oct-2005 People’s Daily
With cooperation between China and the Association of South East Asian Nations (ASEAN) deepening, the construction of a China-ASEAN Free Trade Area (FTA) has entered a full-spectrum cooperation period, said Chong Quan, spokesman for China’s Commerce Ministry.
China likely to profit most from Asean free-trade deal
12-Sep-2005 Bangkok Post
Thailand’s trade deficit with China could be as high as $2 billion in 2018, when the Asean-China free trade area (FTA) agreement becomes fully operational, a study by Chulalongkorn University shows.
China-ASEAN FTA to be one of world’s three pillars
8-Sep-2005
As China and ASEAN are stepping up the construction of a free trade area (FTA) between them, the value of imports and exports of this zone will hopefully exceed that of the NAFTA (North America Free Trade Agreement) by 2010 and its GDP will likely be higher than that in the European Union market.
’Death’ of Benguet veggie industry looms
7-Sep-2005
The feared "demise" of the Benguet vegetable industry due to the free trade agreement looms. Growers expressed this fear when vegetables from Benguet were not excluded from the Early Harvest Program (EHP) signed by the Chinese and Philippine governments.
Asia/FTA brings hope to poorest region
20-Aug-2005
Left behind for years while China’s economy was taking off, the Guangxi Zhuangzu autonomous region is finally showing signs of life thanks to Beijing’s free trade agreement with the Association of Southeast Asian Nations (ASEAN) in 2002.
ASEAN and China on track to sign free-trade deal by 2013
13-Aug-2005 AFP
Malaysian Prime Minister Abdullah Ahmad Badawi on Friday said a free trade agreement with China will be signed by 2013, and that Malaysia’s exports to China surged 25 percent to a record high last year.
FTA to propel regional economy
21-Jul-2005
China and the Association of Southeast Asian Nations (ASEAN) are taking a tangible step towards creating the world’s most populous free trade area (FTA).