VIENTIANE: Negotiations to update the free trade agreement between Southeast Asian countries and China are almost completed after nearly two years, leaders of both sides announced on Thursday (Oct 10) during a summit.
Certain legal details remain to be ironed out, before the upgrade to the ASEAN-China Free Trade Area (ACFTA) – the second one since its inception in 2010 – will be finalised and signed next year.
“This upgrade to the FTA is an important move, especially in this time of growing protectionism in the world,” Prime Minister Lawrence Wong said during the 27th ASEAN-China Summit in Vientiane, which was attended by Chinese Premier Li Qiang.
“It will send a very clear and important message to everyone on the importance of free trade and win-win market cooperation.”
The ACFTA was the Association of Southeast Asian Nations’ (ASEAN) first FTA with an external partner, as well as China’s first FTA, Mr Wong noted.
It has facilitated trade between both sides, resulting in them becoming each other’s top trading partner since 2020, he said.
Since 2010, ASEAN’s trade in goods with China has more than tripled, from US$235.5 billion to US$696.7 billion last year. China invested US$17.3 billion in ASEAN last year, making it the bloc’s largest trading partner and third largest source of foreign direct investment.
The upgrade will let both parties tap on future growth areas, including the digital and green economies, added Mr Wong.
REMAINING RELEVANT AND FUTURE-READY
The ACFTA covers a free trade area of over 2 billion people, with a combined gross domestic product of over US$20 trillion, Singapore’s Ministry of Trade and Industry (MTI) said in a press release on Thursday.
Negotiations for the upgrade had started in 2022, to ensure the agreement remains “relevant, future-ready, and responsive to global challenges”, said the ministry.
