ASEAN, China vow to speed up free trade talks
The Jakarta Post, Nusa Dua, Bali
Leaders of the Association of Southeast Asian Nations (ASEAN) and China agreed on Wednesday to speed up talks to set up a Free Trade Area (FTA) by 2010 that would be the world's largest trading bloc.
In a joint declaration on strategic partnership for peace and prosperity signed by the 11 heads of states and governments, the two sides also agreed to step up economic and trade relations in order to achieve the goal of US$100 billion of two-way trade by 2005 from around $55 billion last year.
The ASEAN and Chinese leaders gathered here for an ASEAN-China summit, which is being held concurrently with the ninth ASEAN leaders summit.
The two sides agreed in November last year in Phnom Penh on a Framework Agreement on Comprehensive Economic Cooperation, which include an FTA plan.
In the joint declaration, the six founding members of ASEAN and China vowed to help the regional grouping's new members Cambodia, Laos, Myanmar and Vietnam to effectively participate in the FTA arrangement and benefit from it. While the six original ASEAN countries Indonesia, Malaysia, Singapore, Thailand, Brunei Darussalam and the Philippines are expected to be able to have an FTA with China in eight years, the CLMV countries are given flexibility to extend the deadline to 2015.
Earlier this week, the economic ministers of ASEAN and China signed an agreement on the amendment of the 2002 FTA framework by expanding the products to be included in the plan to 800 from 600.
Under the FTA plan, the two sides agreed to progressively liberalize trade in goods and services; and establish an open and competitive investment regime. The agriculture sector would be the first to be opened, starting next year, officials have said.
The ASEAN-China FTA will create a market of 1.7 billion consumers, with a combined gross domestic product (GDP) of around $2 trillion and total trade estimated at $1.23 trillion, according to figures published by the ASEAN secretariat. This will make it the biggest FTA in the world in terms of population size, providing huge trade and investment opportunities. The FTA plan is also aimed at enhancing peace and stability in the region.
The joint declaration statement was signed by President Megawati Soekarnoputri, Malaysia's Prime Minister Mahathir Mohamad, Singapore's Prime Minister Goh Chok Tong, Thailand's Prime Minister Thaksin Shinawatra, Philippine's President Gloria Arroyo, Sultan of Brunei Darussalam Hassanal Bolkiah, Cambodia's Prime Minister Hun Sen, Lao's Prime Minister Bounhang Vorachith, Myanmar's Prime Minister Khin Nyunt, Vietnam's Prime Minister Phan Van Khai, and China's Prime Minister Wen Jiabao.
In the joint declaration, the leaders also agreed to deepen cooperation in key areas such as agriculture, human resources development, two-way investment, and the Mekong River Basin development.
China also vowed to support early World Trade Organization membership for Laos and Vietnam.
Meanwhile, Indonesian Minister of Foreign Affairs Hassan Wirayuda said that China's Prime Minister expressed his country's commitment to develop a railway line through Cambodia and Vietnam, which will be linked with the railway connecting Singapore and Kunming in China.
Elsewhere, the 10 ASEAN leaders also signed similar comprehensive economic cooperation frameworks with Japan and India including FTA plans. The ASEAN-India FTA is expected to be in operation by 2011, and ASEAN-Japan FTA in 2012.
ASEAN-China FTA to boost two-way trade, investment
- ASEAN exports to China will increase 48 percent above the 1997 base line scenario - China's exports to ASEAN will rise 55.1 percent - Add 0.9 percent ($5.4 billion) to ASEAN's GDP - Add 0.3 percent ($2.2 billion) to China's GDP