ASEAN, China inch closer to economic cooperation pact

0 Comments | Asian Political News, August 19, 2002

BANGKOK, Aug. 15 Kyodo

Trade negotiators from the 10-member Association of Southeast Asian Nations (ASEAN) and China are near to concluding an initial trade liberalization package to be executed prior to an agreement on a ASEAN-China Free Trade Area (FTA), a Thai official said Thursday.

Apiradi Tantraporn, director general of the Thai Commerce Ministry's Business Economics Department, told a news conference that a framework agreement on economic cooperation between ASEAN and China would be submitted, along with an ''early harvest'' package, to ASEAN and Chinese economic ministers for initial approval when they meet on Sept. 13 in Brunei.

The framework agreement will serve as a legal blueprint for ASEAN and China to forge closer economic cooperation, including the envisaged FTA, which would cover not only in trade in goods but also services, investment, and trade facilitation, Apiradi said.

The early harvest package currently being negotiated and the FTA are the core elements of the framework agreement, he added.

Before the Sept. 13 ministerial meeting, ASEAN and Chinese trade negotiators are scheduled to hold two more meetings -- on Aug. 29 to 31 in Shanghai and on Sept. 6 to 8 in Brunei.

''It is quite certain that ASEAN and China will have to bring down tariffs, pledged in the early harvest package, down to 0% within three years. Implementation of the package is expected to begin in the middle of next year or early 2004,'' Apiradi said.

The early harvest package will cover ''more than a 1,000 items, both agricultural and industrial goods,'' according to a Thai trade negotiator.

She said vegetables fruits and meat will be included in the initial liberalization package, but whether rice and cassava will be there remains to be seen.

Chinese officials have said rice, sugar, tapioca, and rubber are ''sensitive'' items for China, and the two sides have agreed ''that sensitive products will be excluded from the early harvest package,'' she said.

The draft framework agreement will require final approval from leaders of ASEAN countries and China before the initial trade liberalization scheme can be kicked off. The leaders are scheduled to meet in Phnom Penh on Nov. 4, according to the Thai officials.

At their summit in Brunei last November, ASEAN and Chinese leaders agreed to forge the FTA within 10 years.

However, ASEAN's four newer and less-developed members requested they be allowed to complete the tariff reduction plan two or three years after ASEAN's six original countries and China, according to ASEAN officials.

The six original ASEAN members are Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, while the four newer members are Cambodia, Laos, Myanmar and Vietnam.

The China-ASEAN FTA would be the world's largest with a combined market of nearly 1.8 billion people, a regional gross domestic product of $2 trillion and international trade worth $1.2 trillion.