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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


Investment pact urged with bloc
China’s Vice-Premier Zeng Peiyan Sunday pushed for an early conclusion of talks on a China-ASEAN (Association of Southeast Asian Nations) free trade area investment agreement to expand mutual investment.
China sets up new harbor area for planned free trade zone with ASEAN
China has started construction of a bonded harbor area that will form part of a future free trade zone with the Association of Southeast Asian Nations (ASEAN).
ASEAN-China trade to hit $200b in 2008
The value of trade between China and ASEAN may hit $200 billion next year in advance of the targeted ASEAN-China Free Trade Area in 2010 as tariff cuts take effect. China’s exports to ASEAN surged 34 percent between January and July this year, while imports grew 22.4 percent.
China to seal FTA with ASEAN before signing one with Singapore
China will likely conclude the free trade agreement (FTA) with ASEAN first before sealing a similar deal with Singapore, said Chinese Ambassador to Singapore, Zhang Xiaokang.
Thai logistics must improve for ASEAN-China FTA
Thailand must address its logistics problems if it wants to receive full benefit from the ASEAN-China free trade area agreement, to be effective on 2010, according to new research.
Interview: Singapore’s Minister Mentor Lee Kuan Yew hails China-ASEAN ties
Singapore’s founding leader Lee Kuan Yew said Thursday that the China-ASEAN Free Trade Agreement (CAFTA) reached in 2002 offers ASEAN countries an opportunity to ride on China’s fast economic growth.
China, ASEAN sign trade in services agreement of FTA
China and the Association of Southeast Asian Nations (ASEAN) signed on Sunday in Cebu an agreement on Trade in Services of the China-ASEAN Free Trade Area.
Benguet’s vegetable farmers wary of free trade
The Philippine government’s move to liberalize imports, including vegetables, is expected to meet fierce resistance from farmers in the province, who all fear that the policy will spell doom for the local vegetable industry.
Thailand still in deficit with China under ASEAN-Sino FTA
Thailand remained with a deficit of more than Bt1.7 billion (about US$46.6 million) in trade with China under the ASEAN-Sino Free Trade Area (FTA) agreement during the first nine months of this year, according to the Foreign Trade Department.
Age of the FTA
New Hope, one of China’s biggest privately owned companies, is not alone in betting on the business opportunities resulting from the China-Asean FTA and other FTAs with China as a partner.