The world’s biggest consumer market received another boost in the arm, after the Economic Ministers of ASEAN and China signed two Protocols to amend the Framework Agreement on Comprehensive Economic Co-operation between the Association of Southeast Asian Nations and the People’s Republic of China, and the Trade in Goods Agreement under the said Framework Agreement. The signing ceremony was held on the sidelines of the 15th ASEAN-China Summit in Phnom Penh, Cambodia.
“These protocols signify ASEAN and China’s continuous effort in ensuring the smooth implementation of commitments under the Agreement and that the regional trade pact remains relevant to businesses,” said Dr. Surin Pitsuwan, Secretary-General of ASEAN.
The Third Protocol to Amend the Framework Agreement on Comprehensive Economic Co-operation between the Association of Southeast Asian Nations and the People’s Republic of China effectively establishes the ACFTA Joint Committee as the permanent body to oversee, supervise, coordinate and review the implementation of the various Agreements related to the ASEAN-China Free Trade Area (ACFTA). Aside from this, the Third Protocol also provides for the explicit legal linkage between the Framework Agreement and the various Agreements under the Framework Agreement.
The Protocol to Incorporate Technical Barriers to Trade and Sanitary and Phyto-sanitary Measures into 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, on the other hand, is aimed at facilitating the movement of goods within the free trade area by providing for certain disciplines in the application of technical barriers to trade (TBTs) and sanitary and phyto-sanitary (SPS) measures.
“The ACFTA which entered into force in 2005 has played an important role in the impressive growth of trade and investment. China is now the leading trading partner of ASEAN,” highlighted Dr. Surin Pitsuwan.
China has been ASEAN’s largest trading partner since 2009 attributable mainly to the 17.1% annual average growth in ASEAN-China bilateral trade within the first six years of the ACFTA’s implementation. China has also maintained her position as the second biggest destination for ASEAN exports for two consecutive years. According to Chinese statistics for 2011, ASEAN is currently China’s third largest trading partner, stepping up from fourth place in 2010. Meanwhile, foreign direct investment flow from China to ASEAN increased significantly by 116.7% from US$2.8 billion in 2010 to US$6.0 billion in 2011.
The ACFTA boasts of having the largest consumer market size with 1.9 billion consumers with a combined GDP of US$9.4 trillion. As of 1 January 2012, approximately 93% of tariff lines could be traded duty-free between ASEAN 6 (Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand) and China.