The early fruits of faster free trade

The early fruits of faster free trade

China Daily, Asia News Network, Beijing

To fulfill their commitments to the establishment of a China-
ASEAN free-trade area, China and Thailand are set to sign a
tariff reduction agreement in Beijing today.

The package to be signed under the Framework Agreement on
Comprehensive Economic Cooperation between China and the
Association of Southeast Asian Nations will impose a zero tariff
on the trade in fruit and vegetables between China and Thailand,
a member of the Association of Southeast Asian Nations (ASEAN),
from Oct. 1 this year. It will spearhead the full implementation
of the proposed China-ASEAN Free Trade Agreement.

The Sino-Thai drive to achieve early trade liberalization
unequivocally testifies to both countries' resolve to seek common
development and prosperity through enhanced economic and trade
ties. This joint effort also marks a much-needed step forward in
expediting construction of a promising free-trade area between
China and ASEAN.

It was in November 2001 when leaders from China and ASEAN
decided to set up a China-ASEAN Free Trade Area over the coming
10 years. The sheer size of the market of 1.8 billion people, the
largest market of its kind in the world, could underline its very
importance to the world economy.

Amid a global slowdown, trade between China and ASEAN
continued to surge in 2002, jumping 31.8 percent to a high of
US$54.8 billion.

Such robust trade growth gave much credit to optimism on the
trade prospects between China and ASEAN, respectively the sixth
and fifth largest trade partners of each other.

The dynamics of Asian economies justify the great expectation
in the potential of this looming trade bloc involving products
worth almost $2 trillion and trade totaling $1.2 trillion. More
encouraging is that China-ASEAN economic and trade ties have hit
the fast lane since both sides devoted themselves to the great
plan.

China's rapid economic development and its entry into the
World Trade Organization made it a huge potential market for
ASEAN products. However, difficulties in translating the plan
into a reality also cannot be ignored.

To meet the challenges of embarking towards a free-trade zone,
all participants still need to overcome the fact they are at
different stages of development. Trade liberalization means much
more than tariff cuts and removal of non-tariff barriers. A full
free-trade area covers trade in goods and services as well as
investments. Besides high-level talks, a business council, and
joint committees for economic, trade, science and technology co-
operation, intensified bilateral exchanges require co-ordination
on non-traditional security issues too.

A grand plan like the China-ASEAN free-trade area demands
concrete and continuous steps to speed up the rate at which
existing trade liberalization commitments are implemented.

The Sino-Thai tariff cuts on the fruit and vegetable trade,
though not accounting for so heavy a share in bilateral trade,
delivers a push to the pursuit of the shared regional goal.

Instead of over-ambitious declarations to free up all trade,
such an approach of tackling easy things first as China and
Thailand have adopted is more realistic and thus efficient in
demonstrating the benefits of free trade.

Efforts to establish a China-ASEAN free-trade zone are
important and of far-sighted significance for it will not only
help scale up bilateral economic and trade exchanges and boost
common economic development, but also enhance the existing
friendly relations among countries involved.