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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.

(Picture: Workers unions in Indonesia protest against the ASEAN-China FTA)

last update: May 2012


ASEAN and China sign ’dirty’ FTA
ASEAN on Dec. 2 signed a free trade agreement (FTA) with China, a move that has grabbed the world’s attention. The agreement won’t take force until 2010. But since it involves a realignment in the region’s integration, it has caused a domino effect.
Viewpoint: Is ASEAN irrelevant?
Drastic imbalance is likely to be the result of the China-ASEAN FTA. But the blame for this is not China’s. The responsibility is largely ASEAN’s. We had 30 years to build an ASEAN house, and we blew it.
Sino-Asean free trade pact a bane to RP, says Ibon
An economic research group warned an upcoming free trade agreement between China and the Association of Southeast Nations will have adverse effects on the country’s economy.
Indonesia courts the Dragon
Trade liberalization and a push toward enhancing trade and economic cooperation between the 10-nation Association of Southeast Asian Nations (ASEAN) and China are high on the agenda of the new administration of President Susilo Bambang Yudhoyono.
China to speed up FTA process with ASEAN
The Chinese government is willing to speed up the process of the China-ASEAN free trade area (FTA) and promote comprehensive and substantive bilateral cooperation.
Sino-ASEAN FTA nears final stage
Leaders of China and the ASEAN (Association of Southeast Asian Nations) countries are expected to sign a package of free trade deals late next month, enabling the two parties to formally implement a China-ASEAN free trade area (FTA) starting from 2005.
China-ASEAN free trade area: Origins, developments and strategic motivations
This 2003 paper is a political study of the origins, developments and motivations on the Chinese side of the FTA, demonstrating its political, strategic, intellectual and economic basis.
RP vows to fasttrack tariff cuts under Asean-China FTA
The Philippines will accelerate the timetable for its tariff reduction program involving certain agricultural products under the Association of South East Asian Nations (ASEAN)-China Free Trade Area (AFTA) Agreement.
Manila, Beijing hope for China-ASEAN free trade zone soon
Philippine President Gloria Macapagal-Arroyo and Chinese President Hu Jintao expressed hope on Wednesday for the early establishment of a planned free trade zone linking China and the 10-member Association of Southeast Asian Nations (ASEAN).
China-ASEAN agro trade on fast track
The trade of agricultural produce between China and her ASEAN neighbours has benefitted from an early-harvest programme that was put in place earlier this year.