The Association of Southeast Asian Nations (ASEAN) may soon ink investment pacts with China and South Korea to boost economic integration.
The pacts are part of a series of deals under ASEAN’s free trade agreements (FTA) signed with
China in 2005, and South Korea in 2006.
The pact with China could be signed next month in Thailand during the ASEAN meeting with China, South Korea and Japan, an official from the Jakarta ASEAN Secretariat, Lim Chze Cheen, told The Jakarta Post on Tuesday.
The deal with China was aimed at opening up both markets to investment flowing either from China or other ASEAN member countries, Cheen said.
“We will have greater certainty and room, not just from an investment perspective but also in terms of trade,” Cheen said.
The expected pact comes after ASEAN and China’s negotiations for FTAs on goods and services concluded in 2005 and 2006, respectively.
Under the new pact with China, a zero-tariff market is targeted to come into full effect in 2010 for six original ASEAN members, and in 2015 for the other four.
Trade value between ASEAN member states (combined) and China jumped by more than three fold to US$171.1 billion in 2007, from $59.6 billion in 2003, growing at an annual rate of 30 percent.
In terms of trade, for ASEAN member states China is the third largest market after Japan and the EU.
However, for China trade with ASEAN countries ranks fifth after United States., the European Union, Japan and Hong Kong.
Around 3 million Chinese tourists visit ASEAN countries each year.
As well as the pact with China, Cheen said, ASEAN was also expecting to sign a similar agreement with South Korea in June, but he refused to elaborate on this, suggestign only that negotiations were still underway.
ASEAN is South Korea’s fifth-largest trading partner and more than 2.5 million South Koreans travel to ASEAN member states each year.
South Koreans comprise the largest expatriate population (by nationality) in Indonesia.
According to the immigration office, around 40,000 South Koreans have permanent residency in Indonesia.
With a combined population of 575 million (as of 2007), ASEAN groups together Indonesia, Thailand, Singapore, Malaysia, the Philippines, Brunei Darussalam, Vietnam, Cambodia, Laos and Myanmar.
The region has a total trade value of more than $1.8 trillion and a gross regional product of $1.2 trillion.
ASEAN has recently inked an FTA with Australia and New Zealand.
The region is also planning to sign an FTA with India later this year.