Finance:ASEAN–China Free Trade Area

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Short description: Asian free-trade area


ASEAN–China Free Trade Area
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The ASEAN–China Free Trade Area (ACFTA) is a free-trade area among the ten member states of the Association of Southeast Asian Nations (ASEAN) and the China .

History

China first proposed the idea of a free trade area in November 2000. Leaders of ASEAN and China thus decided to explore measures aimed at economic integration within the region[1][2] In Brunei the following year, they endorsed the establishment of an ASEAN–China Free Trade Area.[3]

The framework agreement was signed on 4 November 2002 in Phnom Penh, Cambodia, by eleven heads of government.:[4] Hassanal Bolkiah (Sultan of Brunei Darussalam), Hun Sen (Prime Minister of Cambodia), Megawati Soekarnoputri (President of Indonesia), Bounnhang Vorachith (Prime Minister of Laos), Mahathir bin Mohamad (Prime Minister of Malaysia), Than Shwe (Prime Minister of Burma), Gloria Macapagal Arroyo (President of the Philippines), Goh Chok Tong (Prime Minister of Singapore), Thaksin Shinawatra (Prime Minister of Thailand), Phan Văn Khải (Prime Minister of Vietnam), Zhu Rongji (Premier of the State Council of the People's Republic of China).[4][5]

The first stage implied the 6 first signatories who engaged in the elimination of their tariffs on 90% of their products by 2010.[6] Between 2003 and 2008, trade with ASEAN grew from US$59.6 billion to US$192.5 billion.[7] China's transformation into a major economic power in the 21st century has led to an increase of foreign investments in the bamboo network, a network of overseas Chinese businesses operating in the markets of Southeast Asia that share common family and cultural ties.[8][9] ASEAN members and the People's Republic of China had a combined nominal gross domestic product of approximately United States dollar 6 trillion in 2008.[10][11]

Once the 6 first signatories accomplished their goal by 2010, the CLMV countries (Cambodia, Lao PDR, Myanmar, Vietnam) engaged in the same policy on tariffs, with the same goal to achieve by 2015.[6] In 2010, the ASEAN–China Free Trade Area became the largest free trade area in terms of population and third largest in terms of nominal GDP. It was also the third largest trade volume after the European Economic Area and the North American Free Trade Area.[12][7]

On 1 January 2010, the average tariff rate on Chinese goods sold in ASEAN countries decreased from 12.8 to 0.6 percent pending implementation of the free trade area by the remaining ASEAN members. Meanwhile, the average tariff rate on ASEAN goods sold in China decreased from 9.8 to 0.1 percent.[13] By 2015, ASEAN's total merchandise trade with China reached $346.5 billion (15.2% of ASEAN's trade), and the ACFTA accelerated the growth of direct investments from China and commercial cooperation.[6]

Description

Amendments for the framework of the free trade area mostly concerned Vietnam. These amendments were designed to assist Vietnam lower tariffs and put forth dates as guidelines.[14]

The free trade agreement reduced tariffs on 7,881 product categories, or 90 percent of imported goods, to zero.[15] This reduction took effect in China and the six original members of ASEAN: Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. The remaining four countries were supposed to follow suit in 2015.[16]

Signatories

Flag Country Capital Area (km2) Population
(2017, U.N. data)		 GDP (nominal)
(bln USD, 2017, IMF)		 Currency Official languages
Brunei Brunei Darussalam Bandar Seri Begawan 5,765 428,697 11.9 dollar Malay
Cambodia Cambodia Phnom Penh 181,035 16,005,373 22.2 riel Khmer
Indonesia Indonesia Jakarta 1,904,569 263,991,379 1,015.4 rupiah Indonesian
Laos Laos Vientiane 236,800 6,858,160 17.1 kip Lao
Malaysia Malaysia Kuala Lumpur 329,847 31,624,264 314.4 ringgit Malay, English
Myanmar Myanmar (Burma) Naypyidaw 676,578 53,370,609 66.5 kyat Burmese
Philippines Philippines Manila 300,000 104,918,090 313.4 peso Filipino, English
Singapore Singapore Singapore 707.1 5,708,844 323.9 dollar Malay, Mandarin, English, Tamil
Thailand Thailand Bangkok 513,115 69,037,513 445.3 baht Thai
Vietnam Vietnam Hanoi 331,690 95,540,800 220.4 đồng Vietnamese
China China Beijing 9,640,821 1,409,517,397 12,014.6 renminbi Mandarin

Members of the ASEAN have a combined population of more than 650 million. Indonesia accounts for more than 40 percent of the region's population, and its people have voiced the greatest amount of opposition to the agreement.[17][13]

See also

References

  1. ↑ Richardson, Michael (27 November 2000). "Asian Leaders Cautious on Forging New Regional Partnerships". The New York Times. https://www.nytimes.com/2000/11/27/business/worldbusiness/27iht-ASEAN.2.T.html. 
  2. ↑ Asmoro, Andry (23 December 2009). "ASEAN-China free trade deal: Let's face the music". The Jakarta Post. http://www.thejakartapost.com/news/2009/12/23/aseanchina-free-trade-deal-let%E2%80%99s-face-music.html. 
  3. ↑ Wattanapruttipaisan, Thitapha (April 2003). "ASEAN—China Free Trade Area: Advantages, Challenges, and Implications for the Newer ASEAN Member Countries". ASEAN Economic Bulletin (Institute of Southeast Asian Studies) 20 (1): 31–48. doi:10.1355/AE20-1C. 
  4. ↑ 4.0 4.1 "Framework Agreement on Comprehensive Economic Co-Operation Between ASEAN and the People's Republic of China". ASEAN. 5 November 2002. http://www.aseansec.org/13196.htm. 
  5. ↑ de Castro, Isagani (6 November 2002). "'Big brother' China woos ASEAN". Asia Times Online. http://www.atimes.com/atimes/Southeast_Asia/DK06Ae02.html. 
  6. ↑ 6.0 6.1 6.2 Vasundhara Rastogi (7 December 2017). "ASEAN's Free Trade Agreements: An Overview". https://www.aseanbriefing.com/news/2017/12/07/aseans-free-trade-agreements-an-overview.html. 
  7. ↑ 7.0 7.1 Gooch, Liz (31 December 2009). "Asia Free-Trade Zone Raises Hopes, and Some Fears About China". The New York Times. https://www.nytimes.com/2010/01/01/business/global/01trade.html. 
  8. ↑ Quinlan, Joe (13 November 2007). "Insight: China's capital targets Asia's bamboo network". Financial Times. http://www.ft.com/cms/s/0/67554d8a-920f-11dc-8981-0000779fd2ac.html. 
  9. ↑ Murray L Weidenbaum (1 January 1996). The Bamboo Network: How Expatriate Chinese Entrepreneurs are Creating a New Economic Superpower in Asia. Martin Kessler Books, Free Press. pp. 4–8. ISBN 978-0-684-82289-1. https://archive.org/details/bamboonetworkhow00weid. 
  10. ↑ equivalent to US$11.4 trillion by PPP in 2008
  11. ↑ Brown, Kevin (1 January 2010). "Biggest regional trade deal unveiled". Financial Times. http://www.ft.com/cms/s/0/823707e4-f6f1-11de-9fb5-00144feab49a.html. 
  12. ↑ Walker, Andrew (1 January 2010). "China and Asean free trade deal begins". BBC News. http://news.bbc.co.uk/2/hi/business/8436772.stm. 
  13. ↑ 13.0 13.1 Coates, Stephen (31 December 2009). "ASEAN-China open free trade area". Agence France-Presse. https://www.google.com/hostednews/afp/article/ALeqM5jpXnq4ZwAW7GXKVSlioPhqrT12EQ. 
  14. ↑ "Protocol to Amend the Framework Agreement on Comprehensive Economic Co-Operation Between the Association of South East Asian Nations and the People's Republic of China". ASEAN. 6 October 2003. http://www.aseansec.org/15157.htm. 
  15. ↑ "ASEAN-6 zero tariffs take effect immediately". The Jakarta Post. 2 January 2010. http://www.thejakartapost.com/news/2010/01/02/asean6-zero-tariffs-take-effect-immediately.html. 
  16. ↑ "China-ASEAN FTA pact set to boost trade volume". China Daily. 30 December 2009. http://www.chinadaily.com.cn/china/2009-12/30/content_9244077.htm. 
  17. ↑ Ten Kate, Daniel (1 January 2010). "Free-trade agreement between China, ASEAN grouping comes into force". The China Post. Bloomberg. http://www.chinapost.com.tw/business/asia/asian-market/2010/01/01/238917/Free-trade-agreement.htm. 

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