ASEAN, China sign upgraded free trade agreement

SINGAPORE (ICIS)–The Association of Southeast Asian Nations (ASEAN) and China concluded on 22 November an upgraded free trade pact that is expected to generate two-way trades of $1,000bn and investments of $150bn by 2020.

“The upgrading of the ASEAN-China Free Trade Agreement (ACFTA) aims to streamline and enhance economic cooperation, in line with the changes in the trade and economic landscape between ASEAN and China,” Malaysia’s Ministry of International Trade and Industry (MITI) said in a statement.

Bilateral trade volume surged to around $480bn in 2014, from around $50bn in 2004, when the ACFTA too effect.

The upgraded agreement includes amendments to the agreement on trade in goods, services, investment, economic and technical cooperation, MITI said.

Under the upgraded agreement, China has vowed to improve its services in construction engineering, securities, travel agencies and tourism operators, while the ASEAN members promised to further open their service sectors to China, including commerce, telecommunication, construction, education, environment, finance, tourism and transportation, according to China’s official Xinhua news agency.

China is the top trading partner of almost every ASEAN countries.

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

The upgraded ACFTA was signed during the 27th ASEAN Summit and Related Summits held in Kuala Lumpur, Malaysia, which ran on 18-22 November.

ASEAN leaders during the event also signed a document declaring the formal establishment of an ASEAN Community from 31 December this year and another titled “ASEAN 2025: Forging Together Ahead” that laid out the vision for the next 10 years, according to ASEAN’s official website.

It aims to create a community that is “politically cohesive, economically integrated, and socially responsible.”

“Less was said about the end-2015 targets for ASEAN Economic Community, whose goal was to allow free movement of goods, services and skilled labour as part of a European Union-style integration plan, without a common currency,” Singapore-based UOB Global Economics & Markets Research said in a note.

“ASEAN will now attempt to complete measures unfinished in an eight-year plan by the end of next year after missing the end-2015 goal,” it said.