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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


Indonesia considers moves to protect 11 sectors from China FTA
Indonesian ministers will meet on Friday to discuss a proposal to renegotiate the Asean-China free trade agreement under a "special status" they will request from ASEAN.
Get ready for Asean-China free trade pact: Indonesian Industry Minister
The FTA will allow thousands of products from China to enter Indonesia with no import duties. Millions of workers in the manufacturing sector may be affected.
Official: Malaysia, a springboard for China to penetrate ASEAN
Malaysia can be the springboard for China’s investors and entrepreneurs to penetrate the ASEAN market, a Malaysian official said on Tuesday.
Taiwan, Hong Hong, Macao companies seek new chances as CAFTA approaches
Companies from China’s Taiwan, Hong Kong and Macao tried to seek new chances at China-ASEAN Expo as the operation of China-ASEAN free trade area (CAFTA) approaches.
Industry Ministry firm, still wants possible delays in FTA
The Industry Ministry is carrying on with it’s initiative to delay the timing of tariff reductions under the free trade agreement (FTA) between the Association of Southeast Asian Nations (ASEAN) and China; while the Trade Ministry says that renegotiation is not the only solution (to protect local industry).
Asean must not lose sight of its trade interests
The Association of Southeast Asian Nations (Asean), which marked its 42nd anniversary on Aug 8, has been described as the most successful regional grouping of developing countries.
Minister asks for delay in ASEAN-China FTA start-up
Industry Minister Fahmi Idris said on Tuesday that his ministry’s stance remained firm that the FTA — which will open up various sectors in both markets by gradual reduction of import duty tariffs — would bring more harm than benefits to Indonesia, given China’s superiority over Indonesia with regard to competitiveness.
China-ASEAN Investment Agreement signed
China’s Commerce Minister Chen Deming and the economic ministers from 10 ASEAN member states Saturday morning signed the ASEAN-China Investment Agreement during the 41st ASEAN Economic Ministers Meeting (AEM) and related meetings in Bangkok.
Indonesian manufacturers urge govt to delay China-ASEAN FTA
Indonesian manufacturers have asked the government to delay a free-trade pact between China and the Association of Southeast Asian Nations, or ASEAN, as it may hurt local firms, a senior industry official said on Wednesday.
FTA turns Indonesia’s trade surplus with China into deficit
The implementation of its Free Trade Agreement with China has turned Indonesia’s trade surplus with the former into a deficit of US$3.61 billion, a chamber of commerce and industry official said.