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China-ASEAN free trade ahead

(China Daily)
Updated: 2008-06-23 14:56

Though the formation of the FTA seems to have been relatively quick and easy, there were behind-the-scenes stories that showed it wasn't always a smooth process.

Due to the vastly different economic levels of some of the 10 ASEAN nations, China often found the going difficult during the negotiations.

Long attributed the FTA's ultimate success to China's willingness to give in, even on sensitive issues such as agriculture.

"This is an approach suggested by the-then Premier Zhu who said China could not expect fair play during the talks with the ASEAN," he says.

In one case, the willingness was reflected by China's agreement to the Early Harvest Program under which the two sides agreed to gradually reduce the tariffs on 500 agricultural products to zero beginning in 2004.

The-then ASEAN Secretary-General Ong Keng Yong showed his appreciation for the efforts that China made during the talks when he was interviewed by China Daily last October in Nanning, capital of South China's Guangxi Zhuang autonomous region.

After the China-ASEAN commodity trade agreement was signed in 2004, nations and regions including India, Japan, the US, Australia, and the EU also followed suit embarking on FTA talks with the ASEAN. But, "the relations (with China) are more healthy and positive," Ong Keng Yong says. "China looks at a bigger picture before coming down to the small details". He added that it is a sharp contrast with the other partners' approach, "they usually look at the details first".

Currently, everything seems going smoothly with the China-ASEAN FTA. The China-ASEAN commodity trade agreement and the first round of service trade agreements came into effect in 2005 and 2007. Discussions on investment and two more rounds of service trade agreements are underway and expected to be wrapped up by 2010.

Upward, but hard going

The China-ASEAN FTA stirred up not only interest from the nations in the ASEAN, but more importantly, a fresh wave of FTA talks between China and non-ASEAN members.

China is now involved in 12 FTA negotiations with 29 countries and regions including the Asia-Pacific region, Latin America, EU, Africa and Oceania, according to the Ministry of Commerce (MOFCOM).

The enthusiasm comes partly from the slow progress that the Doha Round of negotiations has made and partly from the rapidly rising trade volume led by the FTA.

The Doha Round, which aims to ease the global imbalance in economic development, officially started in November 2001, and had been scheduled to end before 2005.

But for times, talks were delayed due to disagreements among the WTO members, and they eventually collapsed in 2006 as countries, especially the EU and the US could not agree on some key issues such as size of agriculture tariff cuts.

This force China to resort to some alternatives to enhance its economic and trade relations around the globe and the FTA option presented a nice choice.

Recent MOFCOM statistics show China's trade volume reached $2.17 trillion in 2007, one fourth of which was attributed to the FTA.

The momentum of the FTA talks will increase, especially after President Hu Jintao called for the FTA to be pushed forward when he addressed the 17th CPC National Congress last year. It was the first time the FTA strategy was highlighted at such an event.

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