ASEAN and China Continue Negotiations on Expanded FTA

ASEAN and China have announced that they expect to complete their negotiations on an expanded free trade agreement (FTA) by November of this year. The announcement was made on August 23 during the 47^th Association of Southeast Asian Nations Economic Ministers’ Meeting. During the recent gathering, the economic ministers of the ASEAN nations met with China’s Minister of Commerce, Gao Hucheng.

The original ASEAN-China FTA was enacted in 2010, the agreement aims to eliminate import-export tariffs and other barriers on over 90 percent of all products traded between China and the ASEAN member states.

The goals of the expansion of the current FTA include the further reduction of tariffs and the addition of new provisions on trade in services, investment, economic cooperation, customs procedures and trade facilitation, and rules of origin. In addition, the ministers also discussed the building of the 21^st Century Maritime Silk Road and eight measures proposed by China to strengthen bilateral trade and economic cooperation.

Over the recent years, trade between ASEAN and China has become increasingly important for both sides. In 2014, trade between the Southeast Asian economic bloc and China amounted to US$480.4 billion, an 8.3 percent increase over the previous year and a six-fold rise from the US$78 billion seen in 2003. This number is expected to reach US$500 billion by the end of this year. China now accounts for 14.5 percent of ASEAN’s total trade.

ASEAN is also seeking to upgrade its FTAs with Japan and South Korea by the end of the year in order to help grow the region’s services and investment sectors. ASEAN has set even more ambitious trade targets for 2020, hoping that its trade with China will reach US$1 trillion, and US$200 billion for both Japan and South Korea.

ASEAN also has FTAs in place with countries such as Australia and New Zealand, and is pursuing a range of other agreements, such as the proposed EU-ASEAN FTA. Additionally, individual ASEAN nations are also pursuing their own FTAs, such as the Vietnam-EU FTA and the Philippines-European Free Trade Association (EFTA).

Source: Asean Briefing