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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, militar ...
(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 most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
.


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 Phnom Penh (; km, ភ្នំពេញ, ) is the capital and most populous city of Cambodia. It has been the national capital since the French protectorate of Cambodia and has grown to become the nation's primate city and its economic, indus ...
,
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 Thailand t ...
, 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 one ...
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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 ...
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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 Diah Permata Megawati Setiawati Sukarnoputri (; born 23 January 1947) is an Indonesian politician who served as the fifth president of Indonesia from 2001 to 2004. She previously served as the eighth vice president from 1999 to 2001. Megawati i ...
(
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 is ...
), Bounnhang Vorachith (
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 ...
),
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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 ...
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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 this ...
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),
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),
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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 si ...
),
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),
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 ...
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Premier of the State Council of the People's Republic of China The premier of the State Council of the People's Republic of China, commonly called the premier of China and sometimes also referred to as the prime minister, is the head of government of China and leader of the State Council. The premier is ...
). 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$192.5 billion. China's
transformation Transformation may refer to: Science and mathematics In biology and medicine * Metamorphosis, the biological process of changing physical form after birth or hatching * Malignant transformation, the process of cells becoming cancerous * Trans ...
into a major economic power in the 21st century has led to an increase of foreign investments in the bamboo network, a network of
overseas Chinese Overseas Chinese () refers to people of Chinese birth or ethnicity who reside outside Mainland China, Hong Kong, Macau, and Taiwan. As of 2011, there were over 40.3 million overseas Chinese. Terminology () or ''Hoan-kheh'' () in Hokkien, refe ...
businesses operating in the markets of Southeast Asia that share common family and cultural ties. ASEAN members and the People's Republic of China had a combined
nominal Nominal may refer to: Linguistics and grammar * Nominal (linguistics), one of the parts of speech * Nominal, the adjectival form of "noun", as in "nominal agreement" (= "noun agreement") * Nominal sentence, a sentence without a finite verb * Nou ...
gross domestic product Gross domestic product (GDP) is a money, monetary Measurement in economics, measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjec ...
of approximately
US$ The United States dollar (symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official ...
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 Gross domestic product (GDP) is a monetary 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 subjective nature this measure is ofte ...
. It was also the third largest
trade volume In capital markets, volume, or trading volume, is the amount (total number) of a security (or a given set of securities, or an entire market) that was traded during a given period of time. In the context of a single stock trading on a stock exch ...
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 The North American Free Trade Agreement (NAFTA ; es, Tratado de Libre Comercio de América del Norte, TLCAN; french: Accord de libre-échange nord-américain, ALÉNA) was an agreement signed by Canada, Mexico, and the United States that crea ...
. 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 poli ...
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 and economic union of 10 member states in Southeast Asia, which promotes intergovernmental cooperation and facilitates economic, political, security, militar ...
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 The Comprehensive Economic Partnership for East Asia (CEPEA) is a Japanese led proposal for trade co-operation, free trade agreement, among the 16 present member countries of the East Asia Summit. All those movements and efforts were taken over ...
*
Economic Cooperation Framework Agreement The Economic Cooperation Framework Agreement (ECFA) is a free trade agreement (FTA) between the governments of the People's Republic of China (mainland China, PRC, commonly "China") and the Republic of China (ROC, commonly "Taiwan"), that aims ...
(between ROC and PRC) *
List of free trade agreements A ''list'' is any set of items in a row. List or lists may also refer to: People * List (surname) Organizations * List College, an undergraduate division of the Jewish Theological Seminary of America * SC Germania List, German rugby union ...
*
ASEAN–India Free Trade Area The ASEAN–India Free Trade Area (AIFTA) is a free trade area among the ten member states of the Association of Southeast Asian Nations (ASEAN) and the Republic of India. The initial framework agreement was signed on 8 October 2003 in Bali, Ind ...
(AIFTA) * Bamboo network * Nanning-Singapore Economic Corridor *
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 Area

ASEAN-China Free Trade Area Business Portal

China'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