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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 voices readiness to intensify trade cooperation with China
Indonesia echoed its inclination to deepen cooperation with China in the areas of trade and investment, Trade Minister Enggartiasto Lukita stated.
Is Southeast Asia winning the US-China trade war? not so fast
If the U.S.-China trade war continues or worsens ASEAN countries will also experience a bumpy ride.
Ministry announces changes in rules of origin in ASEAN-China FTA
The Ministry of Industry and Trade has announced amendments to the rules of origin under the ASEAN-China Free Trade Agreement (ACFTA).
Can China’s trade boost with Asean help get the Regional Comprehensive Economic Partnership over the line?
The success of the ASEAN-China FTA in helping to boost business amid Beijing’s tariff dispute with the US bodes well for the upcoming talks on the creation of a RCEP.
China joins ASEAN countries’ chorus for free trade
Chinese Premier Li Keqiang on Monday pledged to jointly promote trade and investment liberalization and facilitation with the Association of Southeast Asian Nations (ASEAN), so as to inject positive energy into the world economy.
Asean, China sign FTA upgrade protocol
Asean and China signed the protocol to amend the existing FTA to an upgraded version.
China to deepen ties with ASEAN by upgrading free trade agreement
China has said it will finish negotiations on upgrading the China-ASEAN Free Trade Area called CAFTA by the end of this year
China to deepen ties with ASEAN by upgrading free trade agreement
China has said it will finish negotiations on upgrading the China-ASEAN Free Trade Area called CAFTA by the end of this year, said Vice-Premier Zhang Gaoli on Friday.
ASEAN and China to strive to end talks on upgraded FTA
Chinese commerce minister Gao Hucheng said that both China and ASEAN have agreed to strive to bring to an end their negotiation on an upgraded version of the China-ASEAN Free Trade Area (FTA) before the end of this year.
Indonesia raises non-tariff barrier to protect local batik against imports
Cheaper fabrics from Malaysia and China are flood in thanks to the ASEAN-China free-trade agreement.