The ASEAN–China Free Trade Area (ACFTA) is a free-trade area among the ten member states of the

Association of Southeast Asian Nations The Association of Southeast Asian Nations, commonly abbreviated as ASEAN, is a regional grouping of 10 Sovereign state, states in Southeast Asia "that aims to promote economic and security cooperation among its ten members." Together, its ...

(ASEAN) and the

People's Republic of China China, officially the People's Republic of China (PRC), is a country in East Asia. With population of China, a population exceeding 1.4 billion, it is the list of countries by population (United Nations), second-most populous country after ...

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 is the Capital city, capital and List of cities and towns in Cambodia, most populous city of Cambodia. It has been the national capital since 1865 and has grown to become the nation's primate city and its political, economic, industr ...

Cambodia Cambodia, officially the Kingdom of Cambodia, is a country in Southeast Asia on the Mainland Southeast Asia, Indochinese Peninsula. It is bordered by Thailand to the northwest, Laos to the north, and Vietnam to the east, and has a coastline ...

, by eleven heads of government.:

Hassanal Bolkiah Hassanal Bolkiah Muiz'zaddin Wad'daulah (born 15 July 1946) is the List of sultans of Brunei, Sultan of Brunei since 1967, and Prime Minister of Brunei, prime minister of Brunei since its independence from the United Kingdom in 1984. He is one ...

(

Sultan Sultan (; ', ) is a position with several historical meanings. Originally, it was an Arabic abstract noun meaning "strength", "authority", "rulership", derived from the verbal noun ', meaning "authority" or "power". Later, it came to be use ...

of Brunei Darussalam), Hun Sen (

Prime Minister of Cambodia The prime minister of Cambodia (, UNGEGN: , ; literally 'chief minister') is the head of government of Cambodia. The prime minister is also the chairman of the Cabinet of Cambodia, Cabinet and leads the executive branch of the Royal Government ...

), Megawati Soekarnoputri ( President of Indonesia), Bounnhang Vorachith ( Prime Minister of Laos), Mahathir Mohamad ( Prime Minister of Malaysia), Than Shwe ( Prime Minister of Burma), Gloria Macapagal Arroyo (

President of the Philippines The president of the Philippines (, sometimes referred to as ) is the head of state, head of government and chief executive of the Philippines. The president leads the executive branch of the Philippine government and is the commander-in-ch ...

), Goh Chok Tong (

Prime Minister of Singapore The prime minister of Singapore, is the head of government of Singapore. The President of Singapore, president appoints the prime minister on the advice and consent of the Cabinet of Singapore. The incumbent prime minister is Lawrence Wong, ...

), Thaksin Shinawatra ( Prime Minister of Thailand), Phan Văn Khải ( Prime Minister of Vietnam), Zhu Rongji ( Premier of the State Council of the People's Republic of China). 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 Overseas Chinese people are Chinese people, people of Chinese origin who reside outside Greater China (mainland China, Hong Kong, Macau, and Taiwan). As of 2011, there were over 40.3 million overseas Chinese. As of 2023, there were 10.5 milli ...

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 monetary measure of the total market value of all the final goods and services produced and rendered in a specific time period by a country or countries. GDP is often used to measure the economic performanc ...

of approximately

US$ The United States dollar (Currency symbol, symbol: Dollar sign, $; ISO 4217, currency code: USD) is the official currency of the United States and International use of the U.S. dollar, several other countries. The Coinage Act of 1792 introdu ...

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 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. In November 2022, China and ASEAN jointly announced the official start of the China-ASEAN FTA 3.0 negotiations. This agreement will encompass the following areas: trade in goods, investment, digital economy, and

green economy A green economy is an economy that aims at reducing environmental risks and ecological scarcities, and that aims for sustainable development without environmental degradation, degrading the environment. It is closely related with ecological econ ...

. The initial round of consultations regarding the China-ASEAN FTA 3.0 negotiations was initiated on February 7, 2023. The Substantial conclusion of the China-ASEAN FTA 3.0 negotiations is proclaimed in Vientiane, Laos, on October 10, 2024.

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 or import tax is a duty (tax), duty imposed by a national Government, government, customs territory, or supranational union on imports of goods and is paid by the importer. Exceptionally, an export tax may be levied on exports of goods ...

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 The Association of Southeast Asian Nations, commonly abbreviated as ASEAN, is a regional grouping of 10 states in Southeast Asia "that aims to promote economic and security cooperation among its ten members." Together, its member states r ...

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.

References

External links

*
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 China Free Trade Area 2010 introductions Free trade agreements of China 2010 in economic history Free-trade areas Foreign trade of Singapore

History

Description

Signatories

See also

References

External links