What Is Asean China Free Trade Agreement
Posted on 2023年5月29日 | By pp-admin
The ASEAN-China Free Trade Agreement (ACFTA) is a trade agreement signed by the Association of Southeast Asian Nations (ASEAN) and China in 2002. It is one of the largest free trade agreements (FTA) in the world, covering a population of over 1.9 billion people and a combined GDP of more than USD 10 trillion.
The agreement aimed to promote economic cooperation between ASEAN member states and China by reducing or eliminating tariffs and non-tariff barriers on goods and services traded between the regions. The ACFTA is divided into two phases: the Early Harvest Program (EHP) and the Normal Track.
The EHP, which started in 2005, saw the elimination of tariffs on more than 7,000 products traded between ASEAN and China. The Normal Track, which began in 2010, aimed to lower tariffs on many more products in the following years.
One of the benefits of the ACFTA is that it has increased trade between ASEAN and China significantly. According to data from the ASEAN Secretariat, trade between China and ASEAN countries reached USD 587.87 billion in 2019, up from just USD 39.5 billion in 2002.
Another benefit is that the ACFTA has also facilitated investment between ASEAN and China. The agreement provides for greater transparency and predictability in investment rules and regulations, making it easier for companies to invest in both regions.
However, the ACFTA has faced several challenges over the years. One of the main challenges is the unequal distribution of benefits between ASEAN member states. Some countries, such as Singapore and Vietnam, have benefited greatly from the agreement, while others, such as Cambodia and Laos, have not seen as much benefit.
Another challenge is the issue of non-tariff barriers, such as technical regulations and standards, which can make it difficult for businesses to export their products to certain markets.
In conclusion, the ASEAN-China Free Trade Agreement has brought many benefits to both regions, including increased trade and investment. However, it also faces challenges that must be addressed to ensure that all ASEAN member states can benefit from the agreement.