ASEAN, China vow to speed up free trade talks

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