Talks on ASEAN-China free trade area to start next year

Talks on ASEAN-China free trade area to start next year

Agence France-Presse, Jakarta

Negotiations for a Southeast Asia-China free trade area with a
potential combined market of 1.7 billion people will start next
year, the Association of Southeast Asian Nations (ASEAN) said
Wednesday.

ASEAN secretary general Rodolfo Severino said Southeast Asian
leaders will sign an agreement on comprehensive economic
cooperation between ASEAN and China during the grouping's summit
in Cambodia on Nov. 4.

The agreement would lead to the creation of an ASEAN-China
free trade area within 10 years and pave the way for the
elimination of tariff and non-tariff barriers on trade in goods,
ASEAN said in a statement.

"With a deepened AFTA (ASEAN Free Trade Area) and the creation
of the ASEAN-China free trade area, companies operating in ASEAN
would have 1.7 billion consumers, with a combined gross domestic
product of US$1.5 trillion to $2 trillion as their potential
market," Severino said in the statement.

Under the AFTA, which came into force this year, six of
ASEAN's more established members have cut tariffs on most goods
traded within the region to between zero and five percent.

Newer members Cambodia, Laos, Myanmar and Vietnam have until
2005 to follow suit.

Severino said Southeast Asian economic integration was vital
if the region was to compete globally.

"The ASEAN market has to approach the level of integration of
China's market if the ASEAN economy is to have a chance of
competing for investments and for markets in terms of efficiency,
productivity and cost," he said.

China has been getting the lion's share of foreign direct
investments into Asia at the expense of Southeast Asia as
investors take advantage of the regional giant's potential market
of more than one billion people.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia,
Myanmar, the Philippines, Singapore, Thailand and Vietnam.