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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.

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


ASEAN and China on track to sign free-trade deal by 2013
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
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).
China-ASEAN FTA feared to hurt S. Korea’s exports: KITA
The implementation of a free trade agreement (FTA) between China and the Association of Southeast Asian Nations (ASEAN) will negatively affect South Korea’s export competitiveness, a private trade promotion body said Tuesday.
Industry balks at ASEAN-China FTA
Industry players are generally the most affected stakeholders in any free trade agreement (FTA), but they continually feel they are being left out of the FTA negotiation process. The implementation of the FTA between China and ASEAN nations — which would see almost all import duties slashed starting on Wednesday and gradually dropping to zero by 2010 — is the latest example.
China, ASEAN to begin FTA despite business anxieties
Starting on July 20, Indonesia and five other members of Association of Southeast Asian Nations (ASEAN) begin the journey of entering a free trade agreement (FTA) with China — creating a massive single market of approximately 1.8 billion people.
Enterprises should know trade pact rules
From July 20, China and the Association of Southeast Asian Nations (ASEAN) are scheduled to lower tariffs on more than 7,000 industrial goods. But according to a recent survey carried out by the China-ASEAN Business Council, 99% of Chinese entrepreneurs had not yet read the Agreement on Trade in Goods while concepts like FTA, ASEAN and ASEAN 10 plus one were new to some respondents.
CAFTA and Korea: Swift countermeasures needed to cushion impacts
The free trade agreement between China and 10 Southeast Asian Nations taking effect this month poses considerable challenges to Korea. The China-ASEAN FTA, or CAFTA, will form the world’s third-largest trading bloc, following NAFTA and the EU.
Korean exporters brace for ASEAN-China FTA
A gradual reduction in tariffs on manufactured goods between China and ASEAN as their free trade pact goes into effect on July 1 spells trouble for Korean exports.
China-ASEAN FTA to boost regional integration —Merrill Lynch
The China-ASEAN Free Trade Agreement (CAFTA) will spur regional integration and address China’s security issues relating to food and energy supply, Merrill Lynch said.
Benguet farmers still wary of veggie imports
Provincial officials heaved a sigh of relief when a Philippine-China trade agreement, which covered vegetables and other items, was not one of the documents signed during last week’s visit of Chinese President Hu Jintao to the country.