China, ASEAN march towards world’s 3rd largest FTA
People’s Daily
22 October 2005
China, ASEAN march towards world’s 3rd largest FTA
With a fast growing trade volume, China and the Association of Southeast Asian Nations (ASEAN) are trying to show the world that the planned free trade area will be an accelerator for regional economy.
"Among all the FTA negotiations that China has been in, the negotiation with the ASEAN is definitely the fastest and most fruitful one," said Zhai Kun, a scholar with the China Institute of Contemporary International Relations.
China and the ASEAN have agreed to build up a free trade area before 2010. There were quite some suspicions when this initiative was first brought out in 2001.
Zhai said people were wondering whether the FTA, whose members were all developing countries with similar economic structures, would be finally completed and effectively boost the integration of regional economy.
However, statistics from the ASEAN Secretariat showed that the China-ASEAN trade volume has been growing at an average speed of 40 percent over the past three years. In 2004, the trade volume surpassed 100 billion US dollars.
"There is little doubt that the trade volume between China and the ASEAN will reach 200 billion US dollars before 2010," an anonymous official with China’s Ministry of Commerce said at the ongoing China-ASEAN Expo, held in Nanning, capital of Southwest China’s Guangxi Zhuang Autonomous Region.
Zhai said so far China and the ASEAN have completed the negotiations on trade in goods and are beginning talks on the fields of investment and services.
Beginning from July, China, Brunei, Malaysia, Indonesia, Myanmar, Singapore and Thailand gave tariff cuts to each other on 7,455 kinds of commodities. The practice was launched in compliance with the Trade in Goods Agreement of a Framework Agreement for Overall Economic Cooperation between China and the ASEAN countries.
Experts believed that implementation of the tariff cut plan would enormously expand trade between China and the ASEAN, and would be of far-reaching significance in the future development of China-ASEAN economic and trade relations.
By 2010, China and six old ASEAN member nations, including Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, will impose zero tariffs on most normal products, while China and the other four new ASEAN members of Cambodia, the Laos, Myanmar and Vietnam will do the same in 2015.
China now mainly imports from ASEAN countries electronic products, crude and liquefied petroleum and gas and vegetable oil, and exports electronic and machinery products, textiles and garments, processed oil and cereals to the ASEAN.
A research from the Thai University of Chulalong Korn said that the China-ASEAN FTA, once completed, would contribute to a 0.9 percent GDP growth to the ASEAN countries and a 0.3 percent rise to China.
The China-ASEAN FTA has a population of 1.8 billion and two trillion US dollars in gross domestic product (GDP). It will become the third largest global trading region after the European Union and the North American Free Trade Zone.
Source: Xinhua
