ASEAN–China Free Trade Area


The ASEAN–China Free Trade Area is a free-trade area among the ten member states of the Association of Southeast Asian Nations and the People's Republic of China.

History

China first proposed the idea of a free trade area in November 2000. Leaders of ASEAN and China thus decided to explore measures aimed at economic integration within the region In Brunei the following year, they endorsed the establishment of an ASEAN–China Free Trade Area.
The framework agreement was signed on 4 November 2002 in Phnom Penh, Cambodia, by eleven heads of government.: Hassanal Bolkiah, Hun Sen, Megawati Soekarnoputri, Bounnhang Vorachith, Mahathir bin Mohamad, Than Shwe, Gloria Macapagal-Arroyo, Goh Chok Tong, Thaksin Shinawatra, Phan Văn Khải, Zhu Rongji.
The first stage implied the 6 first signatories who engaged in the elimination of their tariffs on 90% of their products by 2010. Between 2003 and 2008, trade with ASEAN grew from US$59.6 billion to US$192.5 billion. China's transformation into a major economic power in the 21st century has led to an increase of foreign investments in the bamboo network, a network of overseas Chinese businesses operating in the markets of Southeast Asia that share common family and cultural ties. ASEAN members and the People's Republic of China had a combined nominal gross domestic product of approximately US$6 trillion in 2008.
Once the 6 first signatories accomplished their goal by 2010, the CLMV countries engaged in the same policy on tariffs, with the same goal to achieve by 2015. In 2010, the ASEAN–China Free Trade Area became the largest free trade area in terms of population and third largest in terms of nominal GDP. It was also the third largest trade volume after the European Economic Area and the North American Free Trade Area.
On 1 January 2010, the average tariff rate on Chinese goods sold in ASEAN countries decreased from 12.8 to 0.6 percent pending implementation of the free trade area by the remaining ASEAN members. Meanwhile, the average tariff rate on ASEAN goods sold in China decreased from 9.8 to 0.1 percent. By 2015, ASEAN's total merchandise trade with China reached $346.5 billion, and the ACFTA accelerated the growth of direct investments from China and commercial cooperation.

Description

Amendments for the framework of the free trade area mostly concerned Vietnam. These amendments were designed to assist Vietnam lower tariffs and put forth dates as guidelines.
The free trade agreement reduced tariffs on 7,881 product categories, or 90 percent of imported goods, to zero. This reduction took effect in China and the six original members of ASEAN: Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. The remaining four countries were supposed to follow suit in 2015.

Signatories

FlagCountryCapitalArea Population
GDP
CurrencyOfficial languages
Brunei DarussalamBandar Seri Begawan5,765428,69711.9dollarMalay
CambodiaPhnom Penh181,03516,005,37322.2rielKhmer
IndonesiaJakarta1,904,569263,991,3791,015.4rupiahIndonesian
LaosVientiane236,8006,858,16017.1kipLao
MalaysiaKuala Lumpur329,84731,624,264314.4ringgitMalay, English
Myanmar Naypyidaw676,57853,370,60966.5kyatBurmese
PhilippinesManila300,000104,918,090313.4pesoFilipino, English
SingaporeSingapore707.15,708,844323.9dollarMalay, Mandarin, English, Tamil
ThailandBangkok513,11569,037,513445.3bahtThai
VietnamHanoi331,69095,540,800220.4đồngVietnamese
People's Republic of ChinaBeijing9,640,8211,409,517,39712,014.6renminbiMandarin

Members of the ASEAN have a combined population of more than 650 million. Indonesia accounts for more than 40 percent of the region's population, and its people have voiced the greatest amount of opposition to the agreement.