The ASEAN–China Free Trade Area (ACFTA) is a
free-trade area
A free-trade area is the region encompassing a trade bloc whose member countries have signed a free trade agreement (FTA). Such agreements involve cooperation between at least two countries to reduce trade barriers, import quotas and tariffs, and ...
among the ten member states of the
Association of Southeast Asian Nations
ASEAN ( , ), officially the Association of Southeast Asian Nations, is a political and economic union of 10 member states in Southeast Asia, which promotes intergovernmental cooperation and facilitates economic, political, security, mi ...
(ASEAN) and the
People's Republic of China
China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's List of countries and dependencies by population, most populous country, with a Population of China, population exceeding 1.4 billion, sli ...
.
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
Cambodia (; also Kampuchea ; km, កម្ពុជា, UNGEGN: ), officially the Kingdom of Cambodia, is a country located in the southern portion of the Indochinese Peninsula in Southeast Asia, spanning an area of , bordered by Thailan ...
, by eleven heads of government.:
Hassanal Bolkiah
Hassanal Bolkiah ibni Omar Ali Saifuddien III ( Jawi: ; born 15 July 1946) is the 29th and current Sultan and Yang di-Pertuan of Brunei since 1967 and the Prime Minister of Brunei since independence from the United Kingdom in 1984. He is on ...
(
Sultan of
Brunei Darussalam
Brunei ( , ), formally Brunei Darussalam ( ms, Negara Brunei Darussalam, Jawi: , ), is a country located on the north coast of the island of Borneo in Southeast Asia. Apart from its South China Sea coast, it is completely surrounded by the ...
),
Hun Sen
Hun Sen (; km, ហ៊ុន សែន, ; born 5 August 1952) is a Cambodian politician and former military commander who has served as the prime minister of Cambodia since 1985. He is the longest-serving head of government of Cambodia, and o ...
(
Prime Minister of Cambodia
The prime minister of Cambodia ( km, នាយករដ្ឋមន្ត្រីនៃកម្ពុជា, ) is the head of government of Cambodia. The prime minister is also the chairman of the Cabinet and leads the executive branch of the ...
),
Megawati Soekarnoputri (
President of Indonesia
The President of the Republic of Indonesia ( id, Presiden Republik Indonesia) is both the head of state and the head of government of the Republic of Indonesia. The president leads the executive branch of the Indonesian government and i ...
),
Bounnhang Vorachith
Bounnhang Vorachit ( lo, ບຸນຍັງ ວໍລະຈິດ; born 15 August 1938) is a Laotian politician. He was previously General Secretary of the Lao People's Revolutionary Party and President of Laos from 2016 to 2021.
Early life
Bou ...
(
Prime Minister of Laos
The Prime Minister of the Lao People's Democratic Republic, formerly the chairman of the Council of Government of the Lao People's Democratic Republic, is the head of government of Laos. The highest position in the government, they direct the ...
),
Mahathir bin Mohamad
Mahathir bin Mohamad ( ms, محاضير بن محمد, label= Jawi, script=arab, italic=unset; ; born 10 July 1925) is a Malaysian politician, author, and physician who served as the 4th and 7th Prime Minister of Malaysia. He held the office ...
(
Prime Minister of Malaysia
The prime minister of Malaysia ( ms, Perdana Menteri Malaysia; ms, ڤردان منتري مليسيا, label= Jawi, script=arab, italic=unset) is the head of government of Malaysia. The prime minister directs the executive branch of the fede ...
),
Than Shwe
Than Shwe ( my, သန်းရွှေ, ; born 2 February 1933 or 3 May 1935) is a Burmese strongman politician who was the head of state of Myanmar from 1992 to 2011 as Chairman of the State Peace and Development Council (SPDC).
During thi ...
(
Prime Minister of Burma
The prime minister of Myanmar is the head of government of Myanmar. The post was re-established in 2021 by the State Administration Council, the country's ruling military junta, to lead its nominally-civilian provisional government. The prov ...
),
Gloria Macapagal Arroyo
Maria Gloria Macaraeg Macapagal Arroyo (, born April 5, 1947), often referred to by her initials GMA, is a Filipino academic and politician serving as one of the Deputy Speaker of the House of Representatives of the Philippines, House Deputy Spe ...
(
President of the Philippines
The president of the Philippines ( fil, Pangulo ng Pilipinas, sometimes referred to as ''Presidente ng Pilipinas'') is the head of state, head of government and chief executive of the Philippines. The president leads the executive branch of t ...
),
Goh Chok Tong
Goh Chok Tong (; born 20 May 1941) is a Singaporean former politician who served as Prime Minister of Singapore between 1990 and 2004, and Secretary-General of the People's Action Party between 1992 and 2004. He was the Member of Parliament (MP ...
(
Prime Minister of Singapore
The prime minister of Singapore is the head of government of the Republic of Singapore. The president appoints the prime minister, a Member of Parliament (MP) who in their opinion, is most likely to command the confidence of the majority of ...
),
Thaksin Shinawatra
Thaksin Shinawatra ( th, ทักษิณ ชินวัตร; ; ; Chinese: 丘達新; cnr, Taksin Šinavatra; born 26 July 1949), is a Thai businessman, politician and visiting professor. He served in the Thai Police from 1973 to 1987, ...
(
Prime Minister of Thailand
The prime minister of Thailand ( th, นายกรัฐมนตรี, , ; literally 'chief minister of state') is the head of government of Thailand. The prime minister is also the chair of the Cabinet of Thailand. The post has existed s ...
),
Phan Văn Khải (
Prime Minister of Vietnam
The prime minister of Vietnam ( vi, Thủ tướng Việt Nam), officially styled as the Prime Minister of the Government of the Socialist Republic ( vi, Thủ tướng Chính phủ nước Cộng hòa Xã hội chủ nghĩa), is the head of g ...
),
Zhu Rongji
Zhu Rongji (; IPA: ; born 23 October 1928) is a retired Chinese politician who served as Premier of the People's Republic of China from 1998 to 2003 and CCP Politburo Standing Committee member from 1992 to 2002 along with the Chinese Communist ...
(
).
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
Transformation may refer to:
Science and mathematics
In biology and medicine
* Metamorphosis, the biological process of changing physical form after birth or hatching
* Malignant transformation, the process of cells becoming cancerous
* Tran ...
into a
major economic power in the 21st century has led to an increase of foreign investments in the
bamboo network
The Bamboo network () or the Chinese Commonwealth () is a term used to conceptualize connections between businesses operated by the Overseas Chinese community in Southeast Asia. The Overseas Chinese business networks constitute the single most ...
, 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
Gross domestic product (GDP) is a money, monetary Measurement in economics, measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjec ...
of approximately
US$6 trillion in 2008.
Once the 6 first signatories accomplished their goal by 2010, the
CLMV countries (Cambodia, Lao PDR, Myanmar, Vietnam) 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
The European Economic Area (EEA) was established via the ''Agreement on the European Economic Area'', an international agreement which enables the extension of the European Union's single market to member states of the European Free Trade Ass ...
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 (15.2% of ASEAN's trade), 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
tariff
A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and p ...
s 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
Members of the
ASEAN
ASEAN ( , ), officially the Association of Southeast Asian Nations, is a Political union, political and economic union of 10 member Sovereign state, states in Southeast Asia, which promotes intergovernmental organization, intergovernmental coo ...
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.
See also
*
ASEAN Free Trade Area
The ASEAN Free Trade Area (AFTA) is a trade bloc agreement by the Association of Southeast Asian Nations supporting local trade and manufacturing in all ASEAN countries, and facilitating economic integration with regional and international alli ...
*
Chiang Mai Initiative
*
Comprehensive Economic Partnership for East Asia
*
Economic Cooperation Framework Agreement (between ROC and PRC)
*
List of free trade agreements
*
ASEAN–India Free Trade Area (AIFTA)
*
Bamboo network
The Bamboo network () or the Chinese Commonwealth () is a term used to conceptualize connections between businesses operated by the Overseas Chinese community in Southeast Asia. The Overseas Chinese business networks constitute the single most ...
*
Nanning-Singapore Economic Corridor
The China-Indochina Peninsula economic corridor (CICPEC) is an economic corridor initiated in 2010 and incorporated later into the Belt and Road Initiative. It was known before as the Nanning-Singapore Economic Corridor.
The economic corridor con ...
*
Rules of Origin
Rules of origin are the rules to attribute a country of origin to a product in order to determine its "economic nationality". The need to establish rules of origin stems from the fact that the implementation of trade policy measures, such as tari ...
*
Market access
In international trade, market access is a company's ability to enter a foreign market by selling its goods and services in another country. Market access is not the same as free trade, because market access is normally subject to conditions or req ...
*
Free-trade area
A free-trade area is the region encompassing a trade bloc whose member countries have signed a free trade agreement (FTA). Such agreements involve cooperation between at least two countries to reduce trade barriers, import quotas and tariffs, and ...
*
China and Southeast Asia in the Xi Jinping Era
References
External links
Documents on the ASEAN–China Free Trade AreaASEAN-China Free Trade Area Business PortalChina's official CAFTA website
China Asean Free Trade website
{{DEFAULTSORT:Asean-China Free Trade Area
Trade blocs
Economy of Brunei
Economy of Myanmar
Economy of Cambodia
Economy of Indonesia
Economy of Laos
Economy of Malaysia
Economy of the Philippines
Economy of Singapore
Economy of Thailand
Economy of Vietnam
ASEAN
2010 introductions
Free trade agreements of China
2010 in economics
Free-trade areas
Foreign trade of Singapore