SE Asia, China sign landmark trade accord
SE Asia, China sign landmark trade accord
Karl Malakunas, Agence France-Presse, Phnom Penh
Chinese Prime Minister Zhu Rongji and Southeast Asian leaders
signed an historic agreement here Monday to create the world's
biggest free trade area embracing 1.7 billion people and two-way
trade worth US$1.2 trillion.
Zhu hailed the deal, saying it would benefit the global
economy and lift his nation's relations with the 10 members of
the Association of Southeast Asian Nations (ASEAN) to
"unprecedented heights".
The free trade area should be completed in 2010 between China
and the six original ASEAN members -- Brunei, Malaysia,
Indonesia, the Philippines, Singapore and Thailand and eventually
create a trade area with an economy worth almost $2 trillion.
The deadline for the less developed ASEAN nations -- Cambodia,
Laos, Myanmar and Vietnam -- was pushed back until 2015.
Zhu said the agreement gave a "forceful impetus" to his
nation's relations with ASEAN and "exerted a positive impact in
the region and the world".
"This will also contribute to faster progress of East Asia
cooperation," he said. "The China-ASEAN relationship has reached
unprecedented heights in history."
Tariff cuts on selected farm products under an "early harvest
package" will start as early as next year, officials said.
Products covered under the early harvest package include live
animals, meat, fish, dairy produce, other animal products, live
trees, vegetables, fruit and nuts.
Zhu said China would faithfully deliver its commitments and
implement the early harvest and other arrangements on schedule.
"We stand ready to make joint efforts with all ASEAN countries
to move forward our all-round economic cooperation through the
establishment of the Free Trade Area," he said.
A statement issued after the signing ceremony said ASEAN and
China would progressively eliminate tariffs and non-tariff
barriers on "substantially all" trade in goods while taking
similar steps to free trade in services.
The two sides also agreed to establish an "open and
competitive" investment regime.
Under the pact, China also accorded the most-favored nation
treatment to Cambodia, Laos and Vietnam, the three ASEAN members
which are not yet members of the World Trade Organization (WTO),
the statement said.
China will reduce or eliminate tariffs imposed on exports from
the three countries, a Chinese official told AFP.
Based on the timeframes for implementing the ASEAN-China FTA
agreement, negotiations to reduce and eliminate tariffs will
start early next year and be concluded by mid-2004.
For services and investment, negotiations are to start early
next year and be concluded "as expeditiously as possible".
Negotiations between the two sides are to be carried out by an
existing body known as the ASEAN-China Trade Negotiations
Committee, which would report to the ASEAN economic ministers and
China's Ministry of Foreign Trade on the progress and outcomes of
negotiations.
Bilateral ASEAN-China trade totaled $41.6 billion last year,
making China the sixth and ASEAN the fifth biggest trading
partners to each other.
Analysts said the free trade agreement will provide an avenue
for ASEAN to engage its giant neighbor as an economic partner
rather than a competitor.
"It means we have freer access to the huge domestic market of
China," National University of Singapore economics professor Jose
Tongzon told AFP before the summit.
"This is where ASEAN should explore the possible areas where
we can benefit from China's free market."
ASEAN and China also signed a pact to co-operate on non-
traditional security issues that covered a range of issues
including terrorism.