1. The Third Consultation between the ASEAN Economic Ministers (AEM) and the Minister of Commerce (MOFCOM) of the People’s Republic of China was held in Jakarta, Indonesia on 4 September 2004.
2. The Consultation was co-chaired by H.E. Rini M. S. Soewandi, Minister for Industry and Trade of Indonesia, and H.E. Bo Xilai, Minister of Commerce of the People’s Republic of China.
ASEAN-China Trade and Investment Relations
3. Despite the adverse impact of SARS in early 2003, the Ministers were pleased to note that ASEAN’s economy grew by 4.97% in 2003 from 4.52% in 2002. Private consumption and a strong external demand, which had boosted exports, were the major drivers of the economic growth in most ASEAN Member Countries.
4. The Ministers were also pleased to note the high economic growth of China that reached 9.1% in 2003 from 8.0% in 2002, driven by strong domestic demand, export growth, and a recovery in the services sector. China’s rapid economic development provides a significant boost to ASEAN-China trade and investment relations.
5. Over the years, economic and trade cooperation between ASEAN and China has been growing fast. The Ministers noted and were satisfied by the growth of ASEAN exports to and imports from China that reached US$ 47.3 billion and US$ 30.9 billion in 2003, respectively. These presented an increase of 51.7% and 31.2%, respectively, from the previous year. The trade values in 2004 are expected to increase further by a great margin as indicated by figures for the first 7 months of this year where ASEAN exports to and imports from China were recorded at US$34.5 billion and US$ 22.2 billion respectively, representing a respective increase of 40.7% and 34.1% from the same period of 2003. Up to now, ASEAN has become China’s fifth export market and fourth import source.
6. Mr. Wen Jiabao, the Premier of China, proposed at the 10+1 Summit of 2003 that the trade value between China and ASEAN reach beyond the target of US$100 billion before 2005. The Ministers were confident to realise this target, taking into account the fact that the trade value between both sides has been increasing rapidly.
Early Harvest Programme
7. The Ministers noted the significant developments in ASEAN-China economic relations after the signing of the Framework Agreement on Comprehensive Economic Co-operation between the Association of Southeast Asian Nations and the People’s Republic of China and the Protocol to Amend the Framework Agreement. The Ministers acknowledged the benefits from the Early Harvest Programme which was implemented since 1 January 2004 on agricultural product. By July 2004, the trade value of the Early Harvest Programme products between the two sides reached US$1.11 billion representing an increase of 42.3% over the same period of 2003, among which ASEAN exports to China were US$ 0.68 billion, an increase of 49.8% over that same period. They recognized that the Early Harvest Program had improved the business confidence leading to the establishment of the ASEAN-China Free Trade Area as scheduled.
Progress in the Establishment of the ASEAN-China Free Trade Area (ACFTA)
8. The Ministers were pleased with the substantial progress made by the ASEAN-China Trade Negotiating Committee to finalize the negotiations for the “Agreement on Trade in Goods of the Framework Agreement on Comprehensive Economic Co-operation between the Association of Southeast Asian Nations and the People’s Republic of China for the ASEAN-China Free Trade Area” which would be the instrument for realizing the ASEAN-China Free Trade Area in 2010 for ASEAN 6 and China, and 2015 for ASEAN’s newer Member Countries.
9. The Ministers also appreciated the efforts made by the Working Group on Trade in Services and the Working Group on Dispute Settlement Mechanism to finalize the “Agreement on Trade in Services of the Framework Agreement on Comprehensive Economic Cooperation between the Association of Southeast Asian Nations and the People’s Republic of China for the ASEAN-China Free Trade” and the “Agreement on Dispute Settlement Mechanism between the Association of Southeast Asian Nations and the People’s Republic of China.” The Ministers also encouraged both sides to exert efforts on the negotiations of investment in order to finalize the agreement as soon as possible.
10. The draft Agreement on Trade in Goods, the draft Agreement on Trade in Services and draft Agreement on Dispute Settlement Mechanism were considered by the Ministers for signing at the ASEAN-China Summit in November 2004 in Lao PDR. The signing of these agreements paves the way for the implementation of the ASEAN-China Free Trade Area which is expected to increase intra-regional trade and investment, improve efficiency and economies of scale and develop a larger market for capital and talent. The implementation of the FTA will boost mutual prosperity between China and ASEAN and contribute to global economic development.
11. The ASEAN Ministers noted the request of China that ASEAN Member Countries commit not to apply Sections 15 and 16 of the Protocol of Accession of China to the WTO and Paragraph 242 of the Report of the Working Party on the Accession of China to the WTO in relation to the trade between China and ASEAN from the date of the signature of the Trade in Goods Agreement. Each of the ten ASEAN Member Countries agreed to recognize the full market economy status of China.
China-ASEAN EXPO 2004
12. The ASEAN Economic Ministers noted with appreciation China’s effort for hosting the first China-ASEAN Expo 2004 and the first China-ASEAN Business and Investment Summit in Nanning, Guangxi Province in November. The Ministers believed that the China-ASEAN Expo is a new important measure to develop friendly neighborhood relations and strengthen cooperation of mutual benefits between China and ASEAN, and should promote bilateral trade in products and services, as well as investments in the region. The China-ASEAN Business and Investment Summit, on the other hand, should also promote networking among the business people from the two regions and provide the venue for launching economic cooperation activities of mutual benefit to ASEAN and China.
LIST OF MINISTERS
The Meeting was attended by:
- H.E. Pehin Dato Abdul Rahman Taib, Minister of Industry and Primary Resources, Brunei Darussalam;
- H.E. Mr. Cham Prasidh, Senior Minister and Minister of Commerce, Cambodia;
- H.E. Mr. Bo Xilai, Minister of Commerce, People’s Republic of China;
- H.E. Ms. Rini M. S. Soewandi, Minister for Industry and Trade, Indonesia;
- H.E. Mr. Soulivong Daravong, Minister of Commerce, Lao PDR;
- H.E. Dato’ Seri Rafidah Aziz, Minister of International Trade and Industry, Malaysia;
- H.E. U Tin Winn, Minister for Economic Cooperation, Myanmar;
- H.E. Dr. Thomas G. Aquino, Undersecretary of Trade and Industry, Philippines;
- H.E. Mr. Lim Hng Kiang, Minister for Trade and Industry, Singapore;
- H.E. Mr. Watana Muangsook, Minister of Commerce, Thailand;
- H.E. Mr. Truong Dinh Tuyen, Minister of Trade, Viet Nam; and
- H.E. Mr. Ong Keng Yong, Secretary-General of ASEAN.