Afta China Agreement

A year later, a framework agreement was signed for the draft free trade agreement. The free trade agreement, a zero-tariff market of more than 1.7 billion people, is expected to enter into force in 2010 for the six 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 be gradual. For example, China signed a bilateral free trade agreement with ASEAN member Singapore in October 2008. Beijing has also developed many separate, smaller and more specific bilateral agreements with ASEAN neighbours, such as the famous investment agreements between the Philippines and China (the theme of major corruption scandals in the Philippines in 2007), harmonized food security standards with Thailand (to facilitate agricultural trade) and numerous agreements with the Mekong Delta countries. The free trade agreement reduced tariffs to 7,881 product categories, or 90% of imported products at zero. [15] This reduction came into effect in China and in the original six ASEAN members: Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand. The other four countries are expected to follow in 2015. [16] The WIG agreement signed on 29 November 2004 is one of the enabling agreements under the framework agreement. It has set the terms and conditions for reducing and eliminating tariffs for tariff lines either on the normal route or on sensitive rail.

Over the past decade, trade and investment between ASEAN member states and China has increased significantly under the ASEAN Free Trade Area (ACFTA). The Convention on Trade in Goods was signed in 2004 and implemented by all Member States in July 2005. As part of the agreement, the six asean and Chinese members decided to eliminate tariffs on 90% of their products by 2010, while Cambodia, PDR, Myanmar and Vietnam, commonly known as CLMV countries, had until 2015 to do so. Since the signing of the agreement, China has maintained its position as ASEAN`s largest trading partner. In 2015, ASEAN`s total merchandise trade with China amounted to $346.5 billion, or 15.2% of ASEAN`s total trade. In addition, ASEAN received $8.2 billion in FDI from China in 2015, making it the fourth largest source of foreign direct investment for ASEAN. By 2020, ASEAN and China have committed to a common goal of $1 trillion in trade and $150 billion in investment through ACFTA. ASEAN has concluded a number of free trade agreements with other Asian countries that are radically changing the global public procurement and production landscape. It has, for example, a contract with China that has effectively reduced tariff reduction to nearly 8,000 product categories, or 90% of imported goods, to zero.

These favourable conditions came into force in China and in ASEAN members, including Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand.

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